Falling phosphate exports from the disputed territory of Western Sahara

Moroccan phosphate exports have fallen to an eight-year low from the disputed territory of Western Sahara with exports in 2019 almost half of that in the previous year.

In 2018, the North African country exported $165 million worth of phosphate from the Western Saharan port of Laayoune, falling to only US$90 million worth in 2019.

Phosphate from the disputed region, which was seized by Moroccan forces in 1975, accounts for 8% of Morocco’s total phosphate extraction capability. Phosphate rock is one of the country’s top exports, with Morocco holding the largest proven reserves of the resource in the world. Its main use is in the production of fertilisers for commercial agriculture, allowing farmers all over the world to dramatically increase the productivity of their land.

The large reduction in exports has been mainly attributed to declining demand from North America, where annual sales were previously in the region of 900,000 tonnes. This would have a monetary value of around US$80 million. Falling demand around the world could also be due to certain countries questioning the legality of the exports, with some countries not willing to recognise Morocco’s claim over parts of Western Sahara.

THINK LIKE AN ECONOMIST!

Q1. Why is phosphate one of Morocco’s top exports?

Q2. Explain one reason why Moroccan exports of phosphate may have fallen in 2019.

Q3. Assess the impact that the falling phosphate exports from the Western Sahara is likely to have on the Moroccan current account.

Click here for the source article

TheCuriousEconomist

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