The U.S. International Trade Commission ruled Thursday that U.S. phosphate fertilizer companies are “materially injured” by imports from Morocco and Russia, a decision that assures the Commerce Department will begin levying steep duties.
It’s an outcome that U.S. ag groups have warned would reduce supplies and increase the costs of a key farm input.
“We believe countervailing duties on these imports will have a negative impact on the availability of phosphate fertilizer in the United States and, in turn, adversely affect crop production and farmer livelihoods,” American Soybean Association President Kevin Scott said recently in a statement after several farm groups filed comments with the ITC.
The U.S. imported about $730 million worth of phosphate fertilizer from Morocco and $300 million from Russia in 2019, according to the U.S. Department of Commerce.
The Commerce Department, in preparation for the ITC decision, has already set the levels for the final countervailing duty rates. The U.S. will begin to levy duties of 19.97% on imports from Moroccan producer OCP, 47.05% on Russian producers PhosAgro and EuroChem and 17.2% on all other Russian producers.
Perhaps the biggest winner as a result of the ITC decision is the Mosaic Company, the largest phosphate fertilizer producer in the U.S., which originally asked the Commerce Department for an investigation into imports from Morocco and Russia.
Alleging OCP and other foreign suppliers are unfairly subsidized by the Moroccan and Russian governments, Mosaic Senior Vice President Ben Pratt told Agri-Pulse in a recent interview that it would be impossible to compete with the cheaper imports.
“Unfair competition from other players would effectively take us out of the market,” he said. “The costs for farmers’ inputs down the road would be much higher.”
OCP said Thursday it is disappointed by the ITC ruling, but the company — which has offices and a subsidiary in the U.S. — promised it would explore ways to continue to supply American farmers.
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“This decision comes despite the arguments presented by the OCP Group demonstrating that there is no basis for such duties, as well as significant voices opposed to Mosaic’s petition from across American agriculture — distributors, associations and cooperatives — and elected officials in the Senate and House of Representatives,” the company said. “Despite this decision, OCP recognizes the supply challenges that American farmers face and is determined to serve them in the future, and will explore the most appropriate options to do so.”
And OCP has several U.S. lawmakers like Sen. Jerry Moran, R-Kan., supporting it.
“U.S. farmers depend on affordable phosphate fertilizers to produce a variety of crops, including corn, soybeans, cotton, wheat, sorghum, sugar beets and fruits and vegetables,” Moran and other senators said in a letter to the ITC and Commerce Department last summer. “Phosphorous accounts for approximately 20% of fertilizer usage and 15% of total cash costs for producers. The imposition of duties … would result in higher input costs for U.S. farmers.”
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