All good for the Moroccan Group

The counter-offensive of the OCP group to contest the imposition of customs duties which closes the American market to it, to the delight of its American competitor Mosaic (8.7 billion dollars in turnover in 2020), seems to bear fruit at least , at the level of two Chambers which, little by little, are siding with the cause of the Moroccan phosphate giant.

We remember that the OCP Group (6.1 billion dollars in turnover in 2020) led by Mostafa Terrab had in vain challenged the decision of the American administration, to tax its fertilizer imports, with the United States Federal Court of the US administration’s decision to impose tariffs.

The US Court of International Trade ruled in favor of Mosaic’s motion and dismissed the appeal filed by OCP, which sought to overturn the decision of two US administration bodies – the US Department of Commerce (USDC) and the American International Trade Commission (ITC) – which had ruled at the beginning of the year, in favor of the imposition of customs duties (19.97%) on imports of OCP fertilizers from Morocco and destined for of the American market.

As the famous pub would say, “that was before“. Today a lot of water has flowed under the bridge despite global warming. The price of fertilizers is skyrocketing. With the conflict between Ukraine and Russia, the situation has become more complicated for the main agricultural producers throughout the world, including the United States. Something misfortune is good, the situation in Ukraine seems to have even opened up boulevards. Indeed the prices of phosphate fertilizers have soared, with the request of the Russian authorities to its fertilizer producers to suspend their exports.

Consequence: In the United States, fertilizers cost four times more than in 2021 because, among other things, of Mosaic behind a dizzying rise in prices for its benefit, of course. The other side of the coin is to the detriment of American farmers, hence the strong concern of the latter who were very reluctant to want to plant last spring precisely because of soaring fertilizer prices.

Recently, agricultural lobbies including the powerful National Corn Growers Association (NCGA) intervened in favor of the OCP group against this situation and protested in writing to the ITC and Mosaic accusing the latter of having set up a tariff barrier that its competitors (OCP Group and PhosAgro and EuroChem) cannot overcome.

They also expressed their concerns to the elected representatives of the American nation in both chambers. There was a respondent. While there were only seventeen senators to support the Moroccan group and a few actors and agricultural lobbies at the very beginning, there are currently nearly a hundred parliamentarians from both tendencies to take up the cause of OCP & Co.

They ask the ITC to remove the countervailing duties on imports of phosphate fertilizers from the OCP Group. Recently, Kansas Senator Roger Marshall added his voice to previous appeals. He called on the International Trade Commission to lift taxes on OCP’s vital products along with fertilizers from Russia and Trinidad and Tobago. The US senator asserted that Moroccan fertilizers do not pose a threat to locally made ones and that continuing to tax them hurts US farmers above all else.

At first glance, the case seems better engaged. So much so that the Court of International Trade is even considering appealing the decision taken in March 2021 by the United States International Trade Commission (ITC) to impose countervailing duties of 19.9% ​​on fertilizers manufactured in Morocco. For the Federal Court, this ITC measure only amplifies the difficulties of American producers suffering the full brunt of a generalized surge in input prices, linked to the Russian-Ukrainian conflict.

It smells good for OCP, the United States is the fourth destination for shipments of phosphates behind Brazil, India and Bangladesh. The OCP Group’s counter-offensive seems to have borne fruit and a hearing presided over by US judge Stephen Alexander Vaden was held at the end of last month in New York before the United States Federal Court of International Trade (USCIT ) to discuss. The decision is expected for this summer, we believe.

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