The Commerce Department is sharply cutting its duty on Moroccan phosphate fertilizer products, according to a statement from the National Corn Growers Association, spurring optimism that imports will resume and provide American farmers with more supply options and better prices.
The reduction in the tariff to 2.12%, down from 19.97%, is welcome news, according to Moroccan fertilizer giant OCP, but the company is not yet ready to commit to exporting monoammonium phosphate (MAP) and diammonium phosphate (DAP) while awaiting the results of two separate remands by judges at the U.S. Court of International Trade.
The CIT rulings favored OCP. One concluded that the International Trade Commission used faulty logic in finding that Moroccan fertilizer harmed U.S. producers. The other ordered the Commerce Department to reevaluate after determining it had made errors when it calculated the duty.
“We’re very eager to reenter the market to help supply American farmers … for the long term,” OCP North America CEO Kevin Kimm told Agri-Pulse Thursday. “I think soon we will have an opportunity to help support the U.S. farmer.”
The company is waiting to hear how Commerce and ITC respond to the two remands. In a best-case scenario for OCP, the ITC would rule that domestic fertilizer companies were not harmed by imports from Morocco or Commerce would decide to lower the duty further or do away with it completely. If it were to drop below the de minimis level of 2%, that would effectively be the same as zero.
Commerce is expected to respond to the remand in December, while the ITC has until mid-January.
The Commerce decision to slash the duty rate is a victory that "was made possible by corn growers across the country who spoke out against these duties as they faced skyrocketing fertilizer prices and product shortages at the behest of The Mosaic Company,” NCGA President Harold Wolle said in a statement.
U.S. fertilizer company Mosaic was a petitioner that helped convince the ITC and Commerce that Moroccan and Russian phosphate products were unfairly undercutting U.S. producers. The ITC ruled in 2021 that the imported phosphates significantly injured domestic producers Mosaic and Simplot, paving the way for countervailing duties, which were set by Commerce.
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As a result, OCP stopped shipments to the U.S., angering lawmakers like Sen. Roger Marshall, R-Kan., who told Agri-Pulse in a recent statement: “Under the current regulatory conditions, the United States has made it exceedingly difficult, if not impossible, to expand phosphate production domestically. We must have access to import phosphate fertilizer to meet the needs of our producers. While I certainly don’t want foreign governments to distort trade with the United States, we can’t continue to punish fertilizer importers for a lack of domestic accessibility.”
American farmers spent $36.9 billion on fertilizer in 2022, compared to $24.4 billion in 2020, according to NCGA. Those costs have remained relatively high in 2023 at $36.4 billion. Phosphate prices increased by 230% from 2020 to 2022, said Nancy Martinez, NCGA’s director of public policy for trade.
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