Morocco has a large fertilizer industry with enormous production capacity and international reach. It is one of the four first fertilizer exporters after Russia, China and Canada.
Fertilizers tend to fall into three main categories; nitrogen fertilizers, phosphorus fertilizers, potassium fertilizers. In 2020, the size of the fertilizer market was about to $190 billion.
Morocco has a clear advantage in the production of phosphorus fertilizers. He owns more 70% of the world’s phosphate rock reserves, from which the phosphorus used in fertilizers comes. And that makes Morocco a guardian of global food supply chains, as all food crops need the element phosphorus to grow. Indeed, the same is true for all plant life. Unlike other limited resources, such as fossil fuels, there is no alternative to phosphorus.
In 2021, the global phosphorus fertilizer market amounted to on 59 billion US dollars. In Morocco, the sector’s 2020 revenues amounted to US$5.94 billion. Office Chérifien des Phosphates, the Moroccan state-owned producer, represented about 20% of the kingdom’s export earnings. It is also the largest employer in the country, providing employment to 21,000 people.
Morocco plans to produce an additional 8.2 million tons of phosphorus fertilizers by 2026. Currently in production is about 12 million tons.
The state corporation recently announcement that it would increase its fertilizer production for the year by 10%. This would put an additional 1.2 million tons on the world market by the end of the year. This will help the markets considerably.
But, as I argue in a new report, Morocco faces new challenges. Its fertilizer production is threatened by increasingly daunting environmental and economic challenges. They include the COVID pandemic and the severe supply chain disruptions that have followed.
The timing of this is crucial.
Russia is currently the first the biggest fertilizer exporter — 15.1% of total fertilizer exported. And fertilizers represent one of the greatest vulnerabilities for Europe and Africa. For example, the EU27 (all 27 member states of the European Union) as a whole depends on Russia to 30% of its fertilizer supply. Russia’s advantageous position is amplified by its status as the world’s second largest producer of natural gas. Gas is a main component of all phosphorus fertilizers as well as nitrogen fertilizers.
For this reason, Russia’s invasion of Ukraine has serious implications for global food security. Both in terms of supply, and also because fertilizers can be used as a weapon or an economic tool.
Morocco could therefore become a central part of the global fertilizer market and a guardian of the global food supply that could offset the attempt to use fertilizers as a weapon.
Morocco began mining phosphorus in 1921. During the 1980s and 1990s, it began producing its own fertilizer. Chérifien Phosphates Office built the largest fertilizer production center in the world in Jorf Lasfar on the Atlantic coast of Morocco.
Before the outbreak of the Russian-Ukrainian war, the company had more than 350 customers on five continents. About 54% of phosphate fertilizers purchased in Africa come from Morocco. Moroccan fertilizers also represent significant domestic market shares in India (50%), Brazil (40%) and Europe (41%). India and Brazil reached out their hand in Morocco to fill additional supply gaps.
The Moroccan economy has reaped the benefits of transformation into an international fertilizer export giant. And in sub-Saharan Africa in particular, the combination of joint venture partnerships in the local production of fertilizers and direct awareness to farmers has led to a remarkable boost to African agricultural yields.
He also expanded the influence of Morocco’s soft power across the continent. For example, Morocco provides more than 90% of Nigeria’s annual fertilizer demand.
But how Morocco handles the challenges of the industry will affect both its own economic development and the stability of food supplies across the world.
Water and energy constraints
Phosphate mining and fertilizer production consume a lot of energy and water. The Moroccan phosphate and fertilizer industry consumes about 7% of its annual energy production and 1% of its water.
Morocco is trying to solve this problem through a National Water Plan 2020-2050. It plans to build new dams and desalination plants and expand irrigation networks, among other measures, to support agriculture and ecosystems. This is estimated cost about 40 billion US dollars.
Natural Gas Costs
Nitrogen is the other basic nutrient that plants need. Diammonium phosphate, the most popular type of phosphorus fertilizer in the world (and which Morocco makes with monoammonium), is made up of 46% phosphorus and 18% nitrogen. Natural gas represents at least 80% the variable cost of nitrogen fertilizers.
This means that the price of natural gas massively affects production costs. But Morocco has few natural gas resources. And natural gas prices have skyrocketed.
How Morocco manages the food-water-energy nexus will affect both its own economic development and the stability of food supplies around the world.
The key is to expand its renewable energy sector. Morocco holds considerable solar and wind resources. Fertilizer manufacturing could be powered by renewable energy, and the renewable energy could be used in the fertilizer itself.
In 2020, the state fertilizer company covered 89% its energy needs through cogeneration (production of two or more forms of energy from a single fuel source) and renewable energy sources. Its objective is to cover 100% of its energy needs in the long term.
Renewable energy could also be used in the fertilizer itself. Instead of importing ammonia derived from natural gas, Morocco could produce its own using hydrogen produced from its domestic renewable energy resources.
According to the state corporation, 31% of its water needs are met by “unconventional” water resources, including treated wastewater and desalinated seawater.
Morocco’s growing reliance on desalination plants to meet industrial, agricultural and residential needs will require significant new investment in power generation from renewable energy sources. Desalination plants require 10 times the amount of energy to produce the same volume of water as conventional surface water treatment.
To sustain operations and develop the production of green ammonia, Morocco will need to find a careful balance between its fertilizer exports, its efforts to develop its high value-added agricultural exports and the supply of drinking water to its population.
By using its significant solar energy resources to power the production of green hydrogen and green ammonia, as well as desalination, Morocco could escape the vicious cycle of the upward price spiral in the food-energy-water nexus.
Scientists propose solutions to the global phosphorus crisis that threatens food and water security
Quote: Morocco, a leading fertilizer producer, may hold the key to the world’s food supply (2022, July 11) Retrieved July 11, 2022 from https://phys.org/news/2022-07- morocco-fertilizer-key-world-food.html
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