By Aziz Alillou- Rabat
Saudi Arabia may emerge as a powerful challenger to Moroccan phosphate in the coming years once it begins offering its phosphate in the world market.
This is bad news for Office Chérifien des Phosphates (OCP), Morocco's largest state-owned company. Though OCP had been driving the commodity's price higher, it is obliged to approach a new strategy to reduce the price now that Saudi Arabia has started exporting its raw phosphate.
Since last year, the Kingdom of Saudi Arabia has been exporting its share of raw phosphate, providing a new offer in the world market that was hitherto dominated by Morocco.
According to Moroccan daily Akhbar Al Youm, it is feared that Saudi Arabia will influence the prices, which could have a negative impact on the revenues of phosphate-exporting countries, including Morocco.
Saudi Arabia will thus be powerful competitor, since it produces phosphates at relatively low cost compared to Morocco. It uses low-cost natural gas to produce ammonia, which is a key ingredient in making diammonium phosphate and monoammonium phosphate.
Morocco, which sits on more than half the world's phosphate reserves, expends more resources than Saudi Arabia in the extraction of its phosphates.
Aware of the challenges posed by competitors in the global phosphate market, OCP invested 140 Billion Dirhams to expand its production capacities.
Meanwhile, Saudi Arabia pool investment composed of Saudi Arabian mining metals company Ma'aden and Mosaic invested $7 billion in their project, which includes a mine and chemical plant to make phosphate-based fertilizer.
Edited by Jessica Rohan
© Morocco World News. All Rights Reserved. This material may not be published, rewritten or redistributed