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US suffers fertilizer shortage after OCP lawsuit against Mosaic

Last fall, the supply chains of commodities like fertilizers and fungicides in the United States experienced major disruption amid the global Covid-19 pandemic. The prices thus reached record levels, which increased during the last spring.

Fertilizer prices have increased 51% since September 2020. Additionally, there is no timetable for prices to return to pre-pandemic levels and some industry experts believe that ‘they will never come back’. Fertilizer supplies were insufficient as many factories closed during the height of the pandemic. As the pandemic raged, Mosaic Company, which produces phosphate and potash, began shutting down factories that were underperforming or had many cases of Covid-19.

However, unlike other chemical productions, phosphate plants that close in the United States do not reopen due to plant restart regulations, said Andy Jung, vice president of market analysis at Mosaic Company. He estimated that the next wave of opening up fertilizer production capacity to global use will likely be three years away.

The shortage of fertilizers is also due to the wave of tariffs imposed during the first days of the year on phosphates imported from Morocco and Russia. The US government had imposed tariffs on low-priced imported Russian and Moroccan phosphate, following a complaint from Mosaic.

In July 2020, the US Department of Commerce opened countervailing duty investigations (CVD) on phosphates imported from Morocco and Russia. Investigations triggered by petitions filed a few weeks earlier by Mosaic Company.

In March 2021, the United States International Trade Commission (USITC) ruled in favor of the American company, considering that the United States is “materially injured because of imports of phosphate fertilizers” from Morocco and Russia.

The departure of Moroccan and Russian companies from the American market had already led to a drop in supply in the United States and an increase in ore prices.

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