Moroccan Argan oil producers brace for change ahead of new export regulation

Argan oil manufacturers in Morocco are preparing for a new governmental measure, that will affect the process, costs, and methods they export the valuable natural resource abroad.

The Moroccan Ministry of Industry and Trade took the decision in early April this year, to subject the international sale of argan oil to an export licensing system, which will see producers apply for government authorization prior to having the authorization to export the goods.

The export license is a government document that authorizes or grants permission to conduct a specific export transaction and is issued by the appropriate licensing agency after a careful review of the facts surrounding the given export transaction.

This decision, which will enter into force as of this upcoming July 1st, aims to protect the natural resource and its small producer cooperatives from foreign exploitation, and create additional added value for stakeholders and argan producers.

The measure was decided to “control the exported quantities, and preserve the jobs of workers in this sector in Morocco,” said Mustapha Baitas, the Moroccan Government’s Spokesperson.

The ministry indicated that bottles containing 5 liters and over of roasted or unroasted argan oil will be subject to the licensing system.

Starting July, exporters wishing to benefit from the above export licenses must submit their applications to the authorities through the PortNet platform, and provide a copy of the provisional invoice.

Government authorities say that the quantities of oil exported do not always benefit the local producers, hence the need for more control. The restrictions come at a time when the products of raw materials have been soaring for several months across international markets.

One of the products most affected by the surge in international prices is oilseeds. The current tensions between Ukraine and Russia are the main reason behind this surge. The FAO indicates that the prices of rapeseed oil and sunflower oil have increased by more than 60%. Faced with this exceptional situation, several countries are taking measures to regulate their exports.

Morocco, the world’s largest producer of argan oil, is therefore responsible of regulating the resource amid global, rising demand, as Argan oil is one of the rarest oils in the world.

Highly prized in the cosmetics sector and usually repackaged in small bottles at the destination, the oil exported in bulk does not directly benefit Morocco or Moroccans. To retain a significant share of the added value, the decision is welcomed by many.

Exports of argan oil have noted a 35.4% increase since the launch of the Green Morocco Plan. The EU is the main destination for exports of argan oil with a share in volume of 86% in 2017- 2018.

The valorization and packaging of the production of the argan tree is carried out through 235 valorization units, mainly based in the regions of Souss-Massa, Marrakech-Safi, and Guelmim-Oued Noun.

In addition, the argan sector plays an important socio-economic role thanks to its multiple and diversified uses, its environmental properties as well as its health, food, and cosmetic virtues, which have been scientifically backed and internationally recognized.

The sector generates a total national turnover of MAD 1,139 million, through 11 million working days per year, providing 12,000 jobs and an export value of an estimated MAD 273 million. The average price of argan oil has risen by 25% between 2012 and 2019.

With the limitation of bulk exports, prices are expected to rise again, which producers are happy about. Sofia B, a cooperative owner, told Hespress EN that “producers are hoping this will help counter the foreign companies’ exploitation of small, rural producers.”

In an interview, the business owner told Hespress EN that “many cosmetics producers who are based in the US, Israel, and France often pay little to nothing for the oil, which they use as a raw material for their products.”

These products end up being sold on the market for prices higher than you could imagine, she says, adding that “the government should directly intervene in taxing and regulating exports for producers, but also advise them on how to commercialize the resource.”