Moroccan Competition Council: Global Market Forces Drive Table Oil Price Surge

For several months, Moroccans have been facing a continuous increase in selling prices on the market for these products. Seized to provide explanatory elements for this inflation, the Competition Council published its opinion on the examination of compliance with the rules of free and fair competition by producers and importers of table oils, reports the MAP.

According to the opinion, the increases in the selling prices of table oils recorded on the domestic market are explained by the combination of objective factors related to the structure of the market itself and developments in the foreign market on which it is dependent.

For the first factor, the body mentions an "almost non-existent" agricultural upstream of the oilseed sector and a transformation activity marked by a "quasi-absence of crushing".

It also recalls that "three countries or groups of countries concentrate almost all of Morocco’s imports of crude oils", while the refining activity remains "with reasonable profit margins" between 4 and 5%.

It must also be added that the supply remains "concentrated in three regions", while local demand is "dominated by soybean oil". The opinion also points to access conditions that make the market, already "highly concentrated and highly oligopolistic", "very unattractive", while its configuration remains "favorable to potential coordination of operators".

As for the reasons related to the foreign market, the opinion acknowledges that world prices for crude oils have "sharply increased since the easing of lockdown measures related to the Covid-19 pandemic", at a time when raw material costs have been "exacerbated by the concomitant rise in energy and transport prices".

The Council also mentions the correlation between domestic market selling prices and world commodity prices and the rapid changes in the application of ex-factory table oil selling prices.