US Slashes Duties on Moroccan Phosphate Fertilizers, OCP Gains Edge Over Mosaic

This week, the U.S. Department of Commerce (Commerce) announced the final results of the first annual administrative reviews of the countervailing duty orders on phosphate fertilizers from Russia and Morocco. It increased the countervailing duty rate for the Russian producer PhosAgro from 9.19% to 28.50%. In contrast, the department reduced the countervailing duty rate for the Moroccan phosphate giant OCP from 19.97% to 2.12%. This is enough to annoy Mosaic, which has often weighed heavily to put its competitor in difficulty. "We are disappointed with the decision on Moroccan imports to the United States and we are considering next steps," Mosaic CEO Joc O’Rourke said in a statement posted on the company’s website. "At Mosaic, we expect and welcome fair competition around the world, and we are confident that Mosaic can compete on a level playing field. We will continue to seek solutions when we see unfair practices."

Stating that OCP continues to benefit from the subsidies that led to the tariffs, the American company explains that these subsidies give it a substantial unfair advantage. "That said, we expect today’s decision (November 2, ed.) to impact trade flows, but it should have little impact on the global supply and demand dynamics for phosphate fertilizers," lamented O’Rourke. And he added: "The countervailing duties have been effective, as many new entrants have shipped phosphate to the United States and helped create a fair and competitive market here, and U.S. prices have returned to parity with global benchmarks."

Based on the findings of the U.S. Department of Commerce regarding subsidies for phosphate fertilizers by the governments of Morocco and Russia, the U.S. International Trade Commission (ITC) had imposed countervailing duties on imports of these materials from the two countries. A countervailing duty of 19% had then been imposed on products from the Moroccan giant OCP. On September 19, the U.S. Court of International Trade ordered the ITC to re-evaluate its decision on tariffs on phosphates and to conduct a new analysis of the situation, within a period of seven months. In June 2020, the American company Mosaic had filed a complaint in which it claimed that "large quantities of phosphate from Morocco and Russia are unfairly subsidized, causing great harm to its interests" on the American market.