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Agriculture

US Fertilizer Company Drives Higher Tariffs on Moroccan Imports

Tuesday 14 May 2024 - 07:35

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The US Commerce Department (USCD) has announced a substantial increase in import duties on Moroccan fertilizers, escalating trade friction between the two nations' fertilizer industries. This decision follows a petition from US-based Mosaic, a leading fertilizer manufacturer, which alleged that its Moroccan counterpart, OCP Group, enjoys an unfair competitive advantage.

Set to take effect in November, the USCD has raised import duties on Moroccan fertilizers from 2.12% to a staggering 14.21%. Conversely, duties on Russian phosphate fertilizers have been lowered from 28.5% to 18.83%, reflecting the complex geopolitical dynamics at play.

The tariff hike will apply retroactively to fertilizer imports from Morocco in 2022, further compounding the financial burden on American farmers who rely on these essential agricultural inputs.

The USCD's announcement comes amid mounting pressure from farmer groups and politicians, who have repeatedly called for expanded imports and reduced tariffs to mitigate the adverse effects of global supply disruptions since 2021. The lingering trade bottlenecks induced by the COVID-19 pandemic and ongoing geopolitical tensions have sent fertilizer prices soaring, significantly increasing production costs for farmers.

While fertilizer prices have eased over the past year, US farmers remain apprehensive that higher tariffs will negatively impact their profitability amid unfavorable market conditions. "The price of corn has dropped, and input costs are already high, so the Commerce Department's decision is the last thing farmers need," said National Corn Growers Association President Harold Wolle, echoing the concerns of many in the agricultural community.

This is not the first time Mosaic has lobbied against OCP Group, often disregarding the livelihood of US farmers. In 2021, the US company's efforts resulted in a sweeping 19.97% hike in import duties on Moroccan fertilizers, effectively granting Mosaic a virtual monopoly over the American fertilizer market. This prompted fierce backlash from farmers' unions, who accused Mosaic of imposing a "stranglehold" on its customers.

Following widespread outcry from farmer groups, bipartisan resolutions from politicians, and an appeal from OCP, the decision was reversed in November 2023, with tariffs dropping back to 2.12%. However, the latest tariff hike reignites the contentious trade dispute, potentially exacerbating the challenges faced by American farmers in an already volatile agricultural landscape.