PHOSPHATE EXPORTS BY JORDAN.

• Author: Azhar, Muhammad

PHOSPHATE EXPORTS LONG HAVE dominated Jordanian foreign trade. Jordan is very rich in its phosphate deposits. It was reported that the first discovery of phosphate deposits in Jordan took place as early as 1894. However, scarcity of capital, unavailability of technology and international political developments came in the way of commercial production. Phosphate production in Jordan could take place only by 1934-35 at the Rusaifa, which has been the first phosphate mine in Jordan. [1] The important areas of Phosphate ore concentration in Jordan are as follows:

1. Ras al-Naqab/Ma'an: A very large area of phosphate deposits, south of Ma'an. Here production started in the new mine of Al-Shidiyah in the second half of 1988. Phosphate ores in Al-Shidiyah contain very high level of tricalcium phosphate between 75-77 per cent. [2]

2. Wadi al-Abyadh: One of the important phosphate mines in Jordan. Currently the largest amount of phosphate is produced from this mine. Phosphate ores in this mine also contain high level of tricalcium phosphate between 73.75 per cent.

3. Mahatta al-Hasaal-Qatranah: This is also one of the largest phosphate mines in Jordan. Phosphate ores at al-Hasa mines also contain high level of tricalcium phosphate between 73-75 per cent.

4. Al-Rusaifa: This mine is located between Amman and Zarqa. Phosphate deposits here contain low level of tricalcium phosphate between 60-62 per cent. Current Production at al-Rusaifa has been reduced to negligibly low levels.

5. Large deposits of phosphate have been located between al-Qatranah and Amman but quantity of phosphate layers is yet to be evaluated.

6. In northeast Jordan, vast phosphate layers have been discovered near Jordan-Iraq border. However, these are also yet to be evaluated. [3]

Jordan's total phosphate ore reserves at the beginning of 1999 were estimated to be 1.7 billion tons. Out of this the Al-Shidiyah mine alone contains 1.5 billion tons of phosphate ores. [4] With the better evaluation of existing mines and with new discoveries, the reserves could further inflate. Jordanian Phosphate Mines Company (JPMC) is the sole authority responsible for the exploration, production, transportation and sales of Jordanian phosphate. Eighty per cent of the shares of Jordanian phosphate Mines Company is held by various agencies of the government of Jordan, the largest (41.5 per cent) being held by Jordanian investment Agency. Whereas about twenty per cent of JPMC's share is owned by non-Jordanian organizations of which the largest (16 per cent) is owned by the Government of Kuwaiti. [5] Up to the mid-eighties phosphate was produced in Jordan on three sites namely Al-Rusaifa, Al-Hasa and Al-Abyadh. However, due to the fall in demand for low-grade phosphate, mining from AlRusaifa has declined to negligible levels. Production from the new Al-Shidiyah mine started in 1988. [6] AI-Shidiyah mines have been developed by JPMC in two stages with the help of World Bank assistance. In the long run JPMC is going to concentrate its production on the vast low-cost Shidiyah mine. This is also evident from Table I, which provides the data for Phosphate production in various mines in Jordan. Where it is observed that of the three major mines, production at al-Hasa and al-Abyadh, although, exceed production at Al-Shidiyah. But production at al-Hasa and al-Abyadh has declined in the given period. Where as production at the new major mine al-Shidiyah has increased tremendously. Production at al-Rusaifa has virtually declined to nil.

From the table, it is also observed that of the total Jordanian phosphate production in 1998, 27.1 per cent came from AI-Shidiyah mine, 32.0 per cent from the Hasa mine and 39.0 per cent from the Abyadh mine. However, phosPhate production during 1990-98 declined by 42 per cent at AI-Hasa and 4 per cent at AI-Abyadh. However, production at AI-Shidiyah increased by 300 per cent during the given period.

By 1968 Jordan's production of rock phosphate rose to 1.16 million tons, which was five times more than the production in 1956. The production further increased to 1.76 million tons by 1976, and by 1985 the total output rose to 5.92 million tons. This was achieved despite the near closure of Rusaifa mine. The production further increased to 6.25 million tons in 1986 and 6.7 million tons in 1987. Jordan's long-term 10 year contract with Thailand, in 1986, for supply of 0.65 million tons of phosphate per year further boosted its phosphate output. However, the production declined marginally in 1988, when Jordan produced 6.5 million tons of rock phosphate. [7] In the years that followed the declining trend continued. It came down to 6.2 million tons in 1990. Within four years it further declined to 4.2 million tons in 1994. Thereafter the production had shown steady improvements and Jordanian phosphate production had increased to 5.9 million tons by 1998.

The amount of Jordanian phosphate production is directly linked with the size its phosphate exports. A substantial amount of Jordanian phosphate is for export purposes. Jordan exports about 65 per cent of its phosphate production. Whereas the remaining amount of phosphate production has been utilized for the domestic consumption to be used as input at the Aqaba fertilizer complex and the Indo-Jordanian Chemicals Company. [8] Since the major portion of Jordanian phosphate is meant for export purposes, any fluctuation in its demand abroad affects the volume of production directly. A decline in the export demand results in decreased level of production, whereas an improvement in the export demand automatically increases the production. This has been the trend in the production profile of the Jordanian rock phosphate. Phosphate exports have been the largest and most important item of Jordanian exports. [9] However, Jordanian export is not limited to phosphate only. There are a few other important items in the Jo rdanian export basket. Potash, another mineral product has been the second most important commodity on the Jordanian list of exports. Jordanian fertilizer has also become substantially important export commodity and in terms of revenue earnings, it has become the third largest item of export. Besides these, Jordan exports agricultural commodities as well. The government of Jordan gives special attention to the agricultural sector and to the production of vegetables for the purpose of export. The vegetables export has been the fourth largest source of export earnings for Jordan. It can be observed that, broadly, the pattern of Jordanian export reflects the existing pattern of production structure in Jordan. Industrial development in Jordan has revolved and remained concentrated to its mineral sectors, especially phosphate and potash. [10]

PHOSPHATE IN JORDANIAN EXPORTS

For many years phosphate has been Jordan's most important item of export. This mineral commodity has remained the largest revenue earner for Jordan. During 1979 the phosphate exports accounted for 43.6 per cent of the total Jordanian export earnings. However, by 1983, the share of revenues from the phosphate exports had declined to 32.2 per cent of the total Jordanian exports. [11] Table 2 provides data about the percentage share of phosphate exports in the total Jordanian exports during the period 1984-98. From the data available in Table 2, it is clear that the share of Phosphate exports in total Jordanian exports has declined considerably during the above period. The revenues inflow on account of phosphate exports constituted 27.0 per cent of total Jordanian export earnings during 1984. However, by 1998, the share of phosphate exports revenues in total Jordanian export revenues had declined to only 13.4 per cent. However, from this we should not conclude that JPMC has not been performing well in the inter national market. Looking deeply at the data in Table 2, it is found that there have been variations in the percentage share of phosphate revenues, even though the phosphate revenues did not register a corresponding unidirectional variation. For example during 1985-86 it is found that phosphate export revenues declined from 66 million dinars in 1985 to 64.8 million dinars in 1986. However, the share of phosphate exports in total Jordanian exports rose to 29.0 per cent in 1986 as compared to its share of 26.0 per cent in 1985. Thus it is found that the share of phosphate exports in total exports improved despite a decline in phosphate revenues. This is explained by the heavy decline in total export revenues during 1986 and severe contraction in the Jordanian export commodities other than phosphate. On the other hand, it is found that during 1987-88, the phosphate export revenues increased from 61.0 million dinars to 76.7 million dinars. However, the share of phosphate exports in total exports declined from 25.0 per cent in 1987 to 24.0 percent in 1988. Further Jordan's phosphate export revenues increased from 97.9 million dinars in 1993 to 100.4 million dinars in 1994. However, the share of phosphate exports in Jordan's total exports decreased from 14.2 per cent in 1993 to 13.0 per cent in 1994. This is explained by the higher growth of the total export revenues in 1988 and 1994 as compared to the growth of phosphate export revenues during these years.

This is so because of a higher expansion of Jordanian export items other than phosphate. However, the fact remains that despite a very substantial decline in the percentage share of phosphate export revenues in total export revenues, it still remains the most important item in Jordanian export basket. Phosphate has remained the largest revenue earner among Jordanian export commodities and still retains its prime importance.

Table 2 provides information about the share of phosphate exports in Jordanian total exports and Table 3 provides data on the volume of Jordanian phosphate exports during 1984-98. With the help of these two tables, it is found that during many years...