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US phosphate prices soar, as duty threat stems imports from Morocco, Russia

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Phosphate prices in the US have risen by one-quarter since Washington unveiled an investigation into imports of the fertilizer from Morocco and Russia, reversing their discount to values in other major markets.

 

Russian fertilizer group PhosAgro reported a transformation in the US phosphate market since Florida-based Mosaic in June petitioned the US government to slap countervailing duties on imports of the nutrient from Morocco and Russia.

 

“Supplies of phosphate-based fertilizers to the United States from Morocco and Russia have practically stopped” since Mosaic’s filing, said Moscow-based PhosAgro,

 

This squeeze on the imports, which topped $1bn last year from the two origins last year, “has led to a significant increase in prices in the US domestic market of more than $60 [per tonne] to date”.

 

From discount to premium

The gains were confirmed in data from Mosaic itself, which reported prices of diammonium phosphate (DAP), the benchmark phosphate fertilizer product, in the bellwether New Orleans market at $343 per tonne, up $69 per tonne since the June 26 filing.

 

That had taken prices above those in other major markets, including China, India, Morocco and Saudi Arabia – which had until recently held the premium

 

Indeed, New Orleans values stood at a $6-per-tonne premium against Moroccan supplies, compared with a $59-per-tonne discount a year ago, with the average 2019 discount at $19 per tonne.

 

Against Moroccan supplies, New Orleans prices had reversed from a $48-per-tonne discount a year ago to a $24-per-tonne premium.

 

‘Upward trend’

The Mosaic data show the narrowing in the discount reflecting both a gain in US values and a decline in prices on other markets.

 

However, nearer term, DAP values have been increasing even on non-US markets, the statistics show, with PhosAgro also reporting an “upward trend” in prices.

 

The Russian group noted support for prices from “stable demand” in the key Brazilian and Indian markets, “against the backdrop of limited exports from China” and with support expected too from a “a boost in seasonal demand in Europe” as farmers prepare for autumn sowings.

 

These factors are “helping balance the market as a whole”, PhosAgro said, reporting Chinese exports of DAP and monoammonium phosphate (MAP) down by 700,000 tonnes, or 27%, in the April-to-June period.

 

‘Causing significant harm’

The United States International Trade Commission three weeks ago said, in an initial statement on Mosaic’s complaint, that it was to continue a probe into phosphate imports from Morocco and Russia, saying that “there is a reasonable indication that a US industry is materially injured” by the trade.

 

Mosaic, the largest US phosphate producer, complained in June that “large volumes of unfairly subsidized imports from Morocco and Russia are causing significant harm” to its operations.

 

The group added that it was seeking “to remedy the distortions that foreign subsidies are causing in the US market for phosphate fertilizers, and thereby restore fair competition”.

 

OCP, the state-owned Moroccan fertilizer giant, said last month that it would challenge the “flawed” allegations.

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