Updates text to include tariff delay for Canadian goods.
Ample stocks of potash in the US would likely delay the impact of the US' Canadian import tariffs on prices and volumes, according to North American fertilizer market participants.
Leading up to the February and March deadlines for the tariffs, a significant volume of Canadian potash was brought into the US, adding onto stockpiles leftover from the fall application season, according to sources.
Potash price movement has been minimal since Tuesday, when the US tariffs were initially put in place before being delayed Thursday, partly because of the stockpiling and because some of the impact of the tariff is already priced into the market. MOP trade at Nola has been flat week-over-week at around $305/st fob. That is up by $50/st from the start of January but $12.50/st lower than the final week of February 2024.
US potash producers Mosaic and Intrepid said an increase in the price of potash from the tariffs would likely materialize for second quarter product. It is unclear what the overall impact on the market would be, but Mosaic said that it would be borne by downstream distributors and end users.
Mosaic also added that the overall impact of tariffs is unclear but that North American and global potash demand would remain robust. The product should remain affordable, Mosaic said, despite expectations of significant disruptions in global potash trade flows and logistics.
But with the impending start of the spring application season on the horizon, and expectations of robust potash demand, potash prices at Nola and further inland could rise.
Earlier today President Donald Trump announced that Mexico, which also was hit with a 25pc tariff on its goods this week, would not be required to pay tariffs on anything that falls under the US-Mexico-Canada free trade agreement at least through 2 April. A similar deal for Canadian goods was announced shortly afterward.
Potash market participants said early Thursday morning that potash could be carved out of the policy in the future, a position advocated by industry groups Agricultural Retailers Association and The Fertilizer Institute.
"Nobody wants this," one source said. "But we are going to hunker down and take [the tariffs] day-to-day."
There is additional confusion among buyers of Canadian potash on how the tariffs will be implemented with shipments that have already been negotiated and which buyers will receive shipments from US warehouses or from across the border.
