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US Anti-Dumping Investigations on Phosphate Imports from Morocco and Russia Progress

Source: Feedindo Logo Final

9 October 2020 – US government determinations in the US phosphate anti-dumping case are expected imminently, and whatever decision is made could impact supply chain movement, and ultimately prices for fertilizer and feed phosphate.

“The USITC will schedule its final phase injury investigation later this year, probably in mid- to late-December,” said Peg O’Laughlin, Public Affairs Officer for the US International Trade Commission. “The investigation is progressing at Commerce at this point.”

The United States International Trade Commission (USITC) voted in August to continue investigations on phosphate fertilizers from Morocco and Russia, stating that there is a reasonable indication that “a US industry is materially injured by reason of imports of phosphate fertilizers that are allegedly subsidized by the governments of Morocco and Russia.”

In July, Commerce announced the initiation of new countervailing duty (CVD) investigations to determine whether producers of phosphate fertilizers in Morocco and Russia are receiving unfair government subsidies.

For Morocco, there are eight alleged subsidy programs, including loan programs, tax programs, less than adequate remuneration programs, and a creditworthiness allegation related to OCP Group. For Russia, there are eight alleged subsidy programs, including less than adequate remuneration programs, tax programs, and a loan program.

If Commerce makes affirmative findings in these investigations, and if the USITC determines that unfairly subsidized US imports of phosphate fertilizers from Morocco and/or Russia materially injure, or threaten material injury to, the US industry, Commerce will impose duties on those imports in the amount of unfair subsidization found to exist.

“The preliminary determination has been extended and is scheduled to be announced on or before November 24, 2020,” a spokesperson for Commerce said. “The final determination is scheduled to be announced on February 9, 2021, unless extended.”
Since the beginning of the Trump Administration, Commerce has initiated 266 new AD and CVD investigations - this is a 241& increase from the comparable period in the previous administration Mosaic Company originally filed the petition on June 26, 2020.

"Mosaic believes in free trade and vigorous competition, and we believe we should compete on a level playing field," said Mosaic President and CEO Joc O'Rourke. "The duties we are seeking will help ensure that North American farmers can rely on the American phosphate industry to supply critical fertilizers for the long term."

In 2019, US buyers imported $729.4 mln in phosphate fertilizers from Morocco and imported $299.4 mln from Russia.

In 2019, Morocco, Russia and Saudi Arabia were the leading importers into the US with subject imports totaling $1,066 mln.

Mosaic and J.R. Simplot, another domestic producer of phosphate fertilizer during the January 2017 to March 2020 period of investigation as well as several respondent parties participated in the preliminary phase of these investigations.

There are five phosphate producers in the US with plants located in Florida, Idaho, Louisiana, Minnesota, North Carolina, and Wyoming.

“Mosaic is not competing on a level playing field,” the company said in a statement. “Government subsidies in Morocco and Russia give phosphate producers unfair cost advantages. This has been a long-term and increasingly injurious situation, and we have engaged in this process to demonstrate unfair trade practices by international competitors.”

The animal feed market accounts for about 6% of phosphate use. Agricultural fertilizers account for more than 80%. Industrial markets, mainly detergents, are around 11%.

Feed phosphate prices in the US have been flat for more than a year, according to FeedInfo.

“If the US suppliers win this case and then we see less imports of feed and fertilizer phosphate into the US, the suppliers will be able to raise domestic prices as supply and demand fundamentals will take a major turn,” a North American buyer said.