Big 5 Moroccan Exporters in Crisis Amid Rising Argan Seed Prices

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The Current Crisis: Rising Argan Seed Prices

To produce just 1 liter of argan oil, manufacturers need 2.1 kg of seeds. Back in 2016, the price per kilogram was around 35 dirhams, and inflation was only 2% annually, making it manageable for producers. However, due to economic pressures, climate change, overharvesting, and rising global demand, seed prices have surged dramatically. Today, they can exceed 120 dirhams/kg—a more than threefold increase in less than a decade. This spike has put immense pressure on production costs, making it harder for companies to stay competitive internationally and threatening the financial stability of the entire supply chain.

Sharp Rise in Argan Seed Prices

The balance in Morocco’s argan industry has recently been disrupted. In March 2024, the cost of argan seeds surged to 225 dirhams per kilogram in Agadir and 240 dirhams in Essaouira, according to Le360. This marks a significant rise compared to previous years, when prices ranged between 120–150 dirhams.

What’s Causing This Spike?

Several factors are driving the price increase.
First, the COVID-19 pandemic worsened existing logistical and labor challenges. Before 2020, cooperatives produced up to 3,000 liters of oil annually. In 2024, some produce barely 50 liters due to soaring seed prices.

Next, while the market recovered slightly post-pandemic, structural problems remain. More intermediaries have entered the supply chain, causing speculative price increases. As a result, producers—especially those sourcing directly from farmers—are seeing their margins shrink.

Climate and Environmental Stress

In addition, climate change is taking a toll.
Unpredictable weather and prolonged droughts have reduced yields from argan trees. The ONICL Agricultural Report (2019–2020) confirms that drought and overgrazing by camel herds—driven from southern areas in search of vegetation—are damaging the groves. Simultaneously, intensive agriculture, such as large greenhouses and fenced farms, is encroaching on the argan ecosystem in Agadir, lowering water table levels essential for argan tree survival.

Local Impact and Market Pressure

Locals—who hold the land rights—have noticed the surge in demand and increasing business interest. Naturally, many seek to profit. They often hold onto the seeds to resell them to the highest bidder, creating even more scarcity.

Moreover, factors like food inflation, poor access to education in rural areas, and ongoing drought are pushing this resource further out of reach. The result? The argan market has become increasingly lucrative, with premium brands like Moroccanoil selling argan oil at up to 980 euros per liter, as seen during Eurovision 2022–2024.

The State Steps In: Stabilizing Argan Oil Prices

Between 2012 and 2020, Morocco invested over 31 billion dirhams to support sustainable argan oil development. Through the National Agency for Oasis Zones and Argan Tree Cultivation, these efforts focus on protecting the environment, empowering rural communities, and supporting the argan oil industry, which earned $31 million in exports in 2021.

The Generation Green 2030 plan aims to restore 400,000 hectares of argan forests and add 50,000 hectares of new plantations.

Why the Big 5 Are Struggling

Rising raw material costs—especially argan seeds, which account for 70% of production costs—have hit major Moroccan exporters hard. Prices tripled from $20 to $56 per unit in just five years. Companies like EFAS and Zineglob now face stiff international competition, including from MoroccanOil and Olvea, which buy seeds in bulk at high prices.

New entrants from Tunisia and Turkey are also entering the market with similar oils, adding pressure.

A Tense Supply Chain

As larger firms compete with small cooperatives, seed prices have surged. While the Big 5 rely on these cooperatives, they’re also squeezed by the high prices and shrinking margins. At the same time, maintaining fair wages and sustainable practices becomes harder.

Temporary Halt in Production

In response, the Big 5 paused production for one month. This break aims to reduce seed prices and renegotiate contracts with cooperatives. The pause is risky but necessary to ensure long-term stability. These companies also fund local associations and women’s cooperatives, showing that profit isn’t their only goal.

What’s at Stake

Without reforms, Morocco’s argan oil sector—generating 1.2 billion dirhams annually and supporting 25,500 jobs—could collapse. Illegal harvesting, high prices, and foreign competition threaten a heritage industry protected by UNESCO.

Argan oil provides nearly half of the income for 29% of rural households, making it essential for both the environment and local livelihoods.

Conclusion

To protect Morocco’s “liquid gold,” urgent collaboration is needed. By stabilizing prices and ensuring fair practices, the industry can remain sustainable. With prices projected to rise by 27% by 2030, now is the time to act—before this vital ecosystem and the lives it supports are lost.