Prices for phosphorous fertilizers in the us corn belt have reached their highest level in a decade, as buyers are shocked by the potential imposition of import duties on Morocco and Russia
Prices for diammonium phosphate in the Midwest, or DAP, jumped 29% in the third quarter of this year, the highest since 2010. Prices for lower-concentration phosphorous fertilizers have also increased in price by 34% over the decade. These two chemicals are the main component of many phosphorous fertilizers used by American farmers, writes Bloomberg.
Prices went up sharply after the U.S. fertilizer company Mosaic Co. filed a petition with the U.S. Department of Commerce and the U.S. international trade Commission in June, saying fertilizer imports from Morocco and Russia were unfairly subsidized. This prompted an investigation and increased the likelihood of introducing countervailing duties.
Russia and Morocco are the two largest suppliers of fertilizer to the us agricultural sector, including in the last crop year, until June.
Last year, the U.S. imported more than 2 million metric tons of phosphorous fertilizers from Morocco, worth $ 729.4 million, according to a report from the Office of international trade.
Imports from Russia totaled more than 767,000 metric tons worth $ 299.4 million.
Russia’s largest producer, PhosAgro, recently said it had stopped shipping products to the US because of the investigation and was redirecting those volumes to Canada, Brazil and Russia.
According to the us census Bureau, the cost of us purchases in the fertilizer import market fell by 57% from the end of may to the end of July, which caused a supply shock in the industry and led to an increase in domestic prices.
“Russian and Moroccan suppliers have slowed imports to the US, which has reduced supply and also contributed to higher prices,” said Alexis Maxwell, research Director at Bloomberg’s Green Markets in a telephone interview.
The slowdown in imports means that Mosaic currently holds more than 90% of the U.S. phosphate production market, which increases the impact on the domestic market of this Plymouth, Minnesota-based company.
“The fact that they were able to change the U.S. fertilizer market so dramatically and that this company was actually the only player,” Maxwell adds.
The U.S. can mitigate the impact of reduced imports from Morocco and Russia by seeking supplies from China, the world’s largest producer of finished phosphates, said Samuel Taylor, an analyst for manufacturing resources in North America at Rabobank.
“These countervailing duties scared the supply people,” Taylor said in a telephone interview. “If we do introduce countervailing duties, you will probably just see changes in global trade flows, but not necessarily any production restrictions.”
Source: https://www.agroxxi.ru
