Resumption of Shipments to the US
In a significant development for the agricultural sector, the OCP Group is preparing to resume shipments of Moroccan phosphate fertilizer to the United States, just two weeks after President Donald Trump announced a suspension of duties on these imports. According to Stephen Vaden, Deputy Secretary of the United States Department of Agriculture (USDA), vessels could potentially set sail for New Orleans as soon as this week or the next. This move comes as OCP's CEO engaged in discussions with USDA officials to finalize the necessary logistics for the delivery of these essential agricultural supplies.
The final obstacle that remains involves determining the classification of these shipments under the presidential order, as noted by Vaden, which is crucial for compliance with US Customs and Border Protection regulations. This duty-free shipment initiative follows Trump's proclamation on June 29, which suspended certain antidumping and countervailing duties on Moroccan phosphate fertilizer for a period of eight months. This measure was taken under Section 318 of the Tariff Act of 1930, a provision from the Great Depression era that permits the importation of supplies without duties during declared emergencies, specifically to address concerns regarding fertilizer availability for US agricultural demands.
Impact on Fertilizer Prices and Agricultural Economy
Despite the impending arrival of duty-free shipments, current phosphate fertilizer prices have shown minimal fluctuation, with monoammonium phosphate (MAP) averaging $954 per ton and diammonium phosphate (DAP) at $912 per ton. However, Vaden anticipates that the price impacts will start to materialize once the shipments reach New Orleans. The USDA estimates that the suspension of duties could lead to a reduction in phosphate fertilizer costs by as much as 22%, translating to approximately $1.82 billion in annual savings for US farmers, benefiting around 100,000 agricultural producers across 97 million acres of planted land. This suspension is noteworthy as it is bound by time rather than volume, allowing OCP to ship an unlimited quantity of fertilizer during the designated eight-month period. Retailers looking to secure lower-priced supplies for future agricultural seasons are encouraged to place large orders, which Vaden describes as a prudent business decision.
The backdrop for this proclamation is a complex interplay of supply chain challenges that have affected fertilizer production globally. The near-complete closure of the Strait of Hormuz since late February has hindered the international supply of sulfur and ammonia, key components in fertilizer manufacturing. Furthermore, China and Russia, which together dominate nearly 40% of the global processed phosphate export market, have indicated a willingness to restrict shipments in favor of their domestic needs. In the US, domestic phosphate production has seen a significant decline of over 50% since 1995, making it increasingly challenging to meet the demands of the agricultural sector.
The suspension of duties effectively dismantles a series of tariffs that had been established over the past five years, following a 19.97% countervailing duty imposed on OCP by Washington in 2021 after the Mosaic Company, based in Florida, claimed that subsidized Moroccan imports harmed the US phosphate industry. This rate fluctuated over time before being reduced to 2.11% by Judge Timothy C. Stanceu in December 2025, with the government eventually dropping its appeal in March 2026. Concurrently, the Federal Trade Commission (FTC) has initiated an investigation into the fertilizer industry, issuing subpoenas for relevant industry information.
This week, a coalition of 17 state corn organizations, including the Iowa Corn Growers Association, urged the Senate Judiciary Committee to facilitate a faster investigation by the Department of Justice (DOJ) into alleged collusive practices within the fertilizer market. They emphasized that while the announcements and reports of investigations are promising, decisive action is necessary to restore fairness in the market. Vaden highlighted recent DOJ settlements as indicators that similar enforcement actions in the fertilizer sector could be forthcoming, cautioning those in the industry to remain vigilant. The USDA is also encouraging farmers to report any suspected anticompetitive behavior, assuring them that their submissions can remain confidential, with a formal reporting portal anticipated in the near future.
As reported by moroccoworldnews.com.
