Reuters — The U.S. Department of Commerce said Tuesday it would set preliminary duties on phosphate fertilizer imports from Russia and Morocco, after launching an investigation to determine if producers in these countries were receiving unfair subsidies.
The department set preliminary duties of 23.46 per cent on imports from Morocco’s OCP Group and other producers in the country, 20.94 per cent on those from Russia’s Phosagro , 72.5 per cent on EuroChem and 32.92 per cent on all other Russian producers.
The decision follows an investigation launched in July on petitions filed by U.S.-based Mosaic Co.
Shares of Mosaic rose about 10 per cent to $22.57, their highest in more than a year, while U.S. and Canada-listed shares of rival Nutrien rose more than three per cent (all figures US$).
Last year, imports of phosphate fertilizers from Morocco were valued at about $729 million and from Russia at about $299 million, according to data from the department.
An oversupply in the phosphate market hurt prices for the fertilizer last year and early this year. While strong demand from Indian and Brazil has helped boost prices more recently, the gains have been limited due to the excess stocks.
Saskatoon-based Nutrien, the world’s biggest fertilizer maker by capacity, took an impairment charge in the third quarter, citing a “less favourable” long-term outlook for phosphate prices and excess supply.
A final decision by the commerce department is expected on Feb. 8, followed by the International Trade Commission’s final decision on March 25, with the issuance of an order on April 1.
BMO Capital Markets analyst Joel Jackson said he expects U.S. phosphate price premiums to continue to hold over the near term.
He added that historically, duties, if imposed, have not changed materially between preliminary and final determinations.
— Reporting for Reuters by Arathy S Nair and Arundhati Sarkar in Bangalore.