US tariffs against China to have limited impact on fertilizers

LONDON (ICIS)–The US tariffs against China are not likely to have any major impact on the fertilizers market, even though the final list includes nearly all the crop nutrients produced in China.

However, fertilizers trading between the two large economies is limited and the latest tariffs are likely to have only a small impact, sources said.

The US has gradually been reducing imports from China and has access to several markets for procuring fertilizers, given the growing and abundant supply of fertilizers worldwide.

Most of the phosphates imports into the US this year have been from Russia, while most urea imports came from Qatar, Canada, Algeria, and Russia.

However, technical grade buyers on the west coast of the US may be impacted, some sources said.

“Although there is very little Chinese [product] coming, it still takes China completely out of play [and] that is not a positive for US supply,” said a barge trader in New Orleans.

“[US] West coast importers, in particular, have one less option and will now need to chase other options. I think the trade war gets worse before it gets better,” it added.

The impact is also expected to be minimal for the Chinese fertilizers industry, given the changing dynamics of the Chinese market over the last few years.

China has significantly reduced its urea exports over the last few years due to higher domestic demand and lower operating rates.

For other fertilizers such as phosphates, Chinese production is running at lower rates as producers look to maximise profits for exports.

“The trade was limited in terms of fertilizers anyway. I believe the tariffs will affect especially emerging markets going forward, like India, Argentina, or Turkey,” said an international fertilizers trader.

“The currencies are deteriorating due to the sharp escalation of confrontation.”

The US tariffs list on Chinese goods include all fertilizers including urea, ammonium sulphate (AS), ammonium nitrate (AN), urea ammonium nitrate (UAN), diammonium phosphate (DAP), or monoammonium phosphate (MAP).

It also includes other phosphates fertilizers like muriate of potash (MOP), also called potassium chloride, sulphate of potash (SOP), sulphur and sulphuric acid, among other forms of fertilizers.

The US has imposed a tariff on these products of 10% from 24 September, which will increase to 25% from 1 January 2019.

Major Chinese fertilizers exports to the US in 2017
Chinese products in US tariff list	Quantity exported to US (tonnes)
Urea	341,242
Ammonium sulphate (AS)	107
Ammonium nitrate (AN)	5,155
Calcium ammonium nitrate (CAN)	405
Muriate of potash (MOP)	492
Sulphur	1,002
Sulphuric acid	72
Diammonium phosphate (DAP)	124,832
Monoammium phosphate (MAP)	9,796
Phosphoric acid	53,359
Nitrogen, phosphorous and potassium (NPK)	1,569

Additional reporting by Sylvia Traganida