PREVIEW
Rabat’s phosphates conglomerate has raised US$1.5 billion in a hybrid bond and is lobbying Brussels to rewrite EU rules turning Iran's war into a market windfall
The United States-Israeli-Iran war has handed Morocco’s Office chérifien des phosphates (OCP) a commercial and strategic opportunity. It has raised US$1.5 billion through its first international hybrid bond, as it seeks to ramp up production to take advantage of the war.
The current blockade and uncertainty about flows of fertiliser on the Strait of Hormuz offers a major commercial opportunity for OCP (AC Vol 67 No 8, Hormuz crisis threatens Africa’s harvests). The US wanted to increase its fertiliser imports from Morocco before the war started, while India and others are looking at OCP’s product to plug fertiliser shortfalls (AC Vol 66 No 17, Arms, gas and fertiliser – Rabat outflanks Algiers with a Trump-linked lobbyist).
The bond comes amid tightening global fertiliser markets driven by the Gulf crisis and by China’s export restrictions. An OCP document published last week indicated that disruptions to sulphur supply – a key fertiliser ingredient – have pushed Middle East sulphur prices about 35% higher since the start of the conflict in late February.
OCP is also looking to boost its share of the lucrative European market by lobbying EU officials to soften the rules in the bloc’s Fertilisers Regulation and encourage imports of its fertiliser in the European Commission’s upcoming Action Plan on fertilisers which is set to be published in the coming days.
Morocco currently has a 19% market share in the EU, down from 32% in 2018, the year before the 2019 Fertilisers Regulation, which imposed a 60mg limit on cadmium volumes in fertiliser (AC Vol 59 No 23, Fertilise this). Moroccan phosphate typically contains up to 80mg/kg.
The issue was raised by Foreign Minister Nasser Bourita with EU High Representative on Foreign Affairs, Kaja Kallas, during meetings in Rabat on 16 April.
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