Russian UAN Imports Subject to Duties

OMAHA (DTN) -- The U.S. Department of Commerce determined late last week that urea ammonium nitrate (UAN) solutions from Russia are being sold in the U.S. at less than fair value. The U.S. International Trade Commission (ITC) will now make the final determination as to whether the domestic industry in the U.S. has been injured and if countervailing tariffs will be applied.

While there is some debate on the effects these tariffs have had on skyrocketing fertilizer prices, some agricultural groups are concerned that this ruling could be another blow to farmers facing increasing input prices.

NEW UAN TARIFFS?

The estimated weighted-average dumping margins recommended by the Department of Commerce for Russian producers of UAN are 8.16% to 122.93% (https://www.federalregister.gov/…). At least four Russian fertilizer companies face these tariffs.

If the ITC determines that material injury exists, the Department of Commerce will issue an antidumping duty order to assess antidumping duties on Russian UAN imports. If the ITC determines that injury does not exist, the proceeding will be terminated.

The ITC voted in August 2021 to continue its investigation into UAN solutions imports from Russia and Trinidad and Tobago. The claim was that these imports are allegedly subsidized and sold into the U.S. at less than fair value.

In February 2022, the Department of Commerce published its preliminary determination in the case. This came after an investigation that took place from April 1, 2020, through March 31, 2021.

This most recent fertilizer trade dispute comes after the ITC ruled in March 2021 to impose 19% tariffs on phosphate fertilizer from Morocco. The ruling imposed tariffs for five years.

Following that ruling, farm groups raised concerns about possible phosphate fertilizer shortages (https://www.dtnpf.com/…). Members of Congress even called for the rollback of tariffs on Moroccan phosphate products (https://www.dtnpf.com/…).

Mosaic, the fertilizer company behind the push for the countervailing duties on Moroccan and Russia phosphate exports, claimed many other factors were the real reason behind the increasing fertilizer prices. Some ag groups, however, disagreed (https://www.dtnpf.com/…).

NCGA PUSHES BACK AGAINST POSSIBLE UAN TARIFFS

One ag group voiced its displeasure with phosphate tariffs and is doing so again with this UAN solution trade dispute. The National Corn Growers Association (NCGA) said in a news release on Thursday that more tariffs on fertilizer are not what U.S. farmers need (https://www.ncga.com/…).

"Placing tariffs on nitrogen fertilizers will land yet another blow to farmers, who are already dealing with a host of issues," according to Brooke S. Appleton, NCGA vice president of public policy.

"Farming is hard enough in the current environment," Appleton said. "Farmers can't do what they do with one hand tied behind their backs. And actions like these, pushed by fertilizer companies, will tie the hands of farmers."

NCGA said their representatives spoke during a recent hearing held by the ITC. NCGA reps told ITC commissioners that tariffs on nitrogen fertilizers will place an undue burden on farmers by creating additional fertilizer shortages and unwarranted price hikes.

The ITC has 45 days to determine if injury has occurred and if the countervailing duties should be applied.

Retail fertilizer prices tracked by DTN continue to show prices near all-time highs. Despite historically higher prices, fertilizer prices in through the second full week of June are mostly lower for the third week in a row https://www.dtnpf.com/….

Russ Quinn can be reached at Russ.Quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

(c) Copyright 2022 DTN, LLC. All rights reserved.