Morocco’s phosphate industry has long been viewed as one of the Kingdom’s major success stories. The mainly state-owned OCP Group — previously known as the Office Chérifien des Phosphates — has worked hard to retain its position as the world’s largest exported of phosphate and phosphate-based products. In 2019 it: had estimated reserves of 50 billion tonnes of reserves of over 70% of the global total; produced 36,000 tonnes; exported 9.5 million tonnes of phosphate rock; and was the world’s largest exporter of phosphoric acid with 1.5 million tonnes or 49% of the global total. 

It has therefore come as a blow when the US Commerce Department announced in July that it had opened an investigation into whether Moroccan producers of phosphate fertilizers were receiving unfair subsidies from the government. Last year Morocco exported over US$729 million of fertilizer to the US. 

The investigation was opened at the end of June after a US phosphate company, the Tampa-headquartered Mosaic Company, filed a petition requesting the initiation of ‘countervailing duty investigations’ into both Morocco and Russia. Under US law, domestic industries are permitted to petition the government to carry out such investigations. The US International Trade Commission (ITC) has also opened its own investigation into the matter.

Mosaic claims that both Moroccan and Russian exporters receive government subsidies which puts it at a disadvantage. Mosaic alleges that there is a subsidy margin of at least 71.5% in the case of Morocco. ‘Mosaic believes in free trade and vigorous competition, and we believe we should compete on a level playing field’ said Mosaic president and CEO James O’Rourke. ‘The duties we are seeking will help ensure that North American farmers can rely on the American phosphate industry to supply critical fertilizers for the long term.’

Although OCP officials have denied it receives any subsidies from the Moroccan state, if the US Commerce Department determines that the imported phosphates are subsidised, it can impose additional duties on the imports. 

If such a finding is made, senior OCP officials have told the media that the company would halt fertilizer sales in the US and seek to redirect sales elsewhere. The ITC is due to release its preliminary findings by 10 August, while the US Commerce Department’s initial findings are due on 21 September.

This excerpt is taken from Morocco Focus, our monthly intelligence report on Morocco. Click here to receive a free sample copy.