The US International Trade Commission is concerned that subsidies on Moroccan and Russian phosphate fertilizer imports harm American fertilizer producers.
Rabat – Morocco’s OCP Group could halt its phosphate fertilizer sales in the US market if the United States Commerce Department imposes anti-subsidy penalties on Moroccan products.
The US Commerce Department decided on July 17 to investigate whether producers of phosphate fertilizers in Morocco and Russia are receiving unfair subsidies.
The investigation comes in response to concerns from American fertilizer company Mosaic and the US International Trade Commission’s (ITC) that such subsidies harm US producers and threaten the domestic industry.
Mosaic kicked off the US fertilizer market debate by filing a petition on June 26 that requests the “initiation of countervailing duty investigations” into phosphate fertilizer imports from Morocco and Russia.
“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,” Mosaic’s CEO said in a statement.
“Mosaic is not competing on a level playing field.”
From January to April of 2020, Morocco and Russia were the top exporters of diammonium phosphate (DAP) and monoammonium phosphate (MAP) to the US.
US imports of Moroccan phosphate fertilizers reached a total value of $729 million in 2019, while imports of Russia phosphate fertilizers totaled approximately $299 million.
Morocco is the second-largest phosphate mining country in the world after China.
The North African country has an extraction capacity of 33 million tons and boasts the largest phosphate reserves at 50 billion tons, accounting for over 70% of global reserves.
Meanwhile, Mosaic, with an operational capacity of 16.1 million tons, is the largest US producer of finished concentrated phosphates in the world.
Will Morocco’s OCP Group exit the US fertilizer market?
OCP’s response to Mosaic was that the Moroccan group “operates in full compliance with all relevant laws and treaty obligations in relation to all sales of its products in the US market.”
An anonymous source from Morocco’s OCP told Reuters, “In the unfortunate event of the imposition of a countervailing duty, OCP would be able to redirect its exports towards other markets.”
OCP will challenge Mosaic’s petition, the source continued. The anonymous OCP official stressed that the group’s fertilizers do not receive any unfair subsidies from the state.
If the US Commerce Department finds that subsidies on phosphate fertilizer imports from Morocco and Russia are harming or threatening American companies’ standing in the US market, it will impose import duties to offset such subsidies.
The department is set to deliver its preliminary findings on September 21.