18 Jan 2024 20:43

PhosAgro: lawyers optimistic about chances to lift duties in U.S., decision expected in March

MOSCOW. Jan 18 (Interfax) - PhosAgro attorneys are optimistic about the chances of eliminating countervailing duties on phosphate fertilizer imports to the U.S., with a decision on this issue possible in March 2024, the company's Deputy CEO for Finance and International Projects Alexander Sharabayko said at a webinar organized by Aton.

"Sometime in March, a decision is expected on whether there are damages [for local fertilizer producers from imports of products from Russia and Morocco]. If the re-vote decision [of the U.S. International Trade Commission] on this issue will be in favor of the importers, i.e. Morocco and Russia, then the duties will be canceled. Our American lawyers are quite optimistic about our chances of winning together with the Moroccans," Sharabayko said.

Duties on U.S. imports of phosphate fertilizers from Russia and Morocco were imposed in the spring of 2021 following an investigation launched at the request of Mosaic, the country's largest phosphate producer. The company claimed that "large volumes of unfairly subsidized imports from Russia and Morocco" were hurting its business.

Russian phosphate fertilizer producers PhosAgro and EuroChem, as well as Morocco's OCP, filed lawsuits in the U.S. Court of International Trade in 2021 seeking to have the duties lifted (the lawsuits were later consolidated into a single proceeding). The court in September 2023 ordered the International Trade Commission (ITC) to reconsider the decision to impose the duties, finding insufficiently reasonable assumptions in its analysis of the situation.

At the same time, in the fall of 2023, the U.S. Department of Commerce raised the countervailing duty rate on PhosAgro's phosphate fertilizer imports from 9.19% to 28.5%, while the duty for Morocco's OCP was reduced from 19.97% to 2.12%.

"As it seems to us, the decision [to increase duties] is absolutely politically motivated. Yes, it closes the U.S. market for the products named in the decision: mainly concentrated phosphate fertilizers. But we can in principle supply NPK [to the U.S.]," Sharabayko said regarding the decision.

Morocco is the largest importer of phosphates to the US market. Russia was second prior to the investigation. According to 2019 data, the volume of phosphate fertilizer imports from Morocco to the US was $700 million (more than 2 million tonnes), from Russia - $300 million (almost 0.8 million tonnes).

The share of the United States in PhosAgro's sales did not exceed 5% of revenue, according to the company.