The Competition Council issued an opinion on “the examination of compliance with the rules of free and fair competition by producers and importers of edible oils following the increases in selling prices observed on the national market”, in which he highlights the explanatory factors of this increase.
The results of the study carried out within the framework of this opinion issued by the Competition Council, which was referred to by the President of the Chamber of Representatives, made it possible to conclude that the increases in the selling prices of edible oils recorded on the national market are explained by the conjunction of objective factors linked to the structure of the market itself and to developments in the external market on which it is dependent.
Thus, among the explanatory factors linked to the market itself, the Council reports an almost non-existent agricultural upstream from the oilseed sector. “Morocco has a structural deficit in terms of raw material used for the manufacture of edible oils. “Almost 98.7% of the country’s domestic needs are imported, mainly in the form of crude oils and only 1.3% is covered by seeds produced locally,” he noted.
Also, the Council cites a processing activity marked by a virtual absence of crushing. “In terms of valuing oilseeds, the crushing activity is carried out by two operators: Lesieur Cristal which is the historical operator with its Casablanca crushing unit and the HSB group with its Ain Taoujdate unit in the Meknes region. ”, Notes the Council.
The Competition Council also notes that three countries or group of countries concentrate almost all of Morocco’s imports in crude oils. “The supply of crude oils is concentrated at the level of three countries or grouping of countries which alone constitute nearly 95% of imports. The European Union (EU) represents 54%, followed by Argentina with nearly 34%, then the United States of America (USA) with around 7% ”, specifies the same source.
He further reported refining activity with reasonable profit margins. “It has been shown that the gross margins generated by the operators remain within reasonable limits. They vary between 4 to 5%. The refining activity, for its part, remains competitive with regard to imports of refined oils which remain marginal ”, explains the Council.
“Nevertheless, this segment continues to be protected by a non-tariff barrier relating to the application of the rule of origin given that at the level of imports of oil already refined, the 0% of customs duties do not apply. apply only to oils whose oil seeds are of EU origin. Otherwise, the 40% rate is applied ”, according to the same opinion.
The Council also raises a supply concentrated in three regions and a local demand dominated by soybean oil. “From a geographical point of view, 100% of national production is grouped together in three regions which at the same time constitute the largest consumption basins in Morocco. The Casablanca-Settat region, where the companies Lesieur Cristal and Savola are located, concentrates more than 62% of the volume produced, followed by the Souss-Massa region which represents 23% of the overall production, provided by the company HSB, then the region Fès-Meknes which covers the 15% of the remaining offer and provided by Siof and HSB ”, informs the Council.
With regard to the explanatory factors linked to the external market, the Council emphasizes the world prices of crude oils which have risen sharply since the start of the easing of containment measures linked to the Covid-19 pandemic and the costs of raw materials aggravated by the concomitant rise in the price of energy and transport.
“The upward trend in world crude oil prices is accentuated by the recent sharp increase in energy, sea freight and freight rates at the global level, due to the rapid and simultaneous recovery of the world economy, characterized by a significant increase in demand, a shortage of containers and port congestion ”, notes the Council.
Among the factors linked to the external market, the Council also mentions the correlation between the selling prices of the national market and the world prices of the materials and the close changes in the application of the selling prices of edible oils ex works.