Groups Oppose Phosphate Tariffs

Corn, Cotton, Soybean Groups Move to Stop New Tariffs on Fertilizer Imports

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The presidents of the American Soybean Association, National Corn Growers Association and the National Cotton Council wrote the U.S. International Trade Commission on Wednesday, warning against placing new countervailing duties against phosphate imports from Morocco and Russia. Imports from the two countries fell last year, and that drove up prices for DAP fertilizer. (DTN file photo)

OMAHA (DTN) -- Leaders from some major commodity groups on Wednesday said farmers would see negative impacts if Mosaic Co. wins a decision to have the federal government place countervailing duties on phosphate fertilizer coming from Morocco and Russia.

The presidents of the corn, cotton and soybean groups called on the U.S. International Trade Commission to deny a petition filed by Mosaic Co. and avoid placing countervailing duties on Moroccan and Russian phosphate. If the tariffs go through, the commodity groups warn, there would be few places in the world for U.S. companies to buy phosphate fertilizer without paying tariffs.

The American Soybean Association, National Corn Growers Association and National Cotton Council of America stated that tariffs on imported phosphate (phosphorus) fertilizers would "adversely affect crop production and farmer livelihoods," in joint comments to the U.S. International Trade Commission (USITC). The groups stated new duties on imported phosphate fertilizers would raise prices more than $80 a ton, decreasing farmer income by $800 million in the process.

The corn, cotton and soybean commodity groups stressed in their letter to the USITC that countervailing duties would affect the availability of phosphorus and lead to shortages. The duties would also reduce competition and choices available to farmers on the market, they said.

Mosaic Co. filed a petition last summer against Moroccan and Russian companies. Last week, the U.S. Commerce Department determined that Morocco and Russia are unfairly subsidizing phosphorus through loans, tax breaks and other forms of government aid and influence. The Commerce Department recommended countervailing duties ranging from 9% to 47%, depending on the supplier.

The USITC is expected to hand down a decision in March. If the USITC reaches the same conclusion as the Commerce Department, then the countervailing duties will go into effect for the next five years.

The U.S. imported just under $1.03 billion in phosphate fertilizers in 2019 from Morocco ($729.4 million) and Russia ($299.4 million). Import volume from Morocco was 2 million metric tons, up about 11% from 2018. Phosphorus imports from Russia were 729,288 metric tons, down about 16% from 2018 shipments.

China controls 43% of global monoammonium phosphate (MAP) and diammonium phosphate (DAP) exports. But U.S. buyers already face a 25% import tariff for Chinese phosphate fertilizers under the Trump administration's Section 301 tariffs. Morocco controls 30% of global phosphate exports and Russia controls 18%. The agricultural groups pointed out the dynamics of adding new countervailing duties to Morocco and Russia, which combined control 48% of the world market.

The end result would be "less than 15% of the exports in the world would be available to U.S. farmers without tariffs."

But the rest of the world doesn't export enough phosphate fertilizer altogether to meet U.S. import demands for MAP and DAP. And the reality is the U.S. cannot capture all those exports.

After the USITC started its investigation, U.S. imports from Morocco and Russia fell in 2020 to roughly half their 2019 levels, the commodity groups stated in their letter. When that happened, other countries were unable to meet U.S. demand for imported DAP. The NOLA DAP price for the U.S. was among the lowest in the world last July, but has more than doubled since then -- rising $174 per ton since early November, "Which is a concern among our farmers," the groups wrote.

"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 livelihood," said Kevin Scott, president of the American Soybean Association and a soybean farmer from Valley Springs, South Dakota.

Commodity groups letter to the U.S. International Trade Commission:…

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Chris Clayton