The "phase one" trade agreement between the US and China signed yesterday will have little impact on fertilizer, sulfur and feedgrade minerals trade.
China agreed to increase purchases of certain US commodities, including agricultural products and fertilizer raw material, but the agreement does not address tariffs imposed by each country since mid-2018.
The US trade representative's office said it will cut the tariff rate on products affected by the September 2019 round of tariffs to 7.5pc from 15pc when the agreement goes into effect on 14 February. President Donald Trump said he will lift all remaining tariffs when a "phase two" deal is finalized.
China's agreement to increase purchases of US goods by $200bn over the next two years includes fertilizer raw materials such as sulfuric acid, phosphoric acid, ammonia and niche categories of sulfur.
But the US is a net importer of sulfuric acid and has not historically exported significant volumes to China.
Similarly, the category of sulfur specified — sublimed or precipitated, rather than elemental — has historically accounted for less than 10,000t/yr of trade with China. Elemental sulfur exports to China, which are not specifically mentioned in the agreement, ranged from 150,000-300,000t/yr during the same period.
Ammonia trade is unlikely to increase significantly with much of Chinese import demand served by Indonesian and Middle Eastern supply. But CF Industries has flexibility to export from Simplot's Rivergate terminal in Portland, Oregon, and traders shipped a couple of cargoes to China in 2017-18.
Feedgrade phosphates were included in the agreement, and the deal further specifies China will enable imports of Mosaic's monocalcium phosphate and feedgrade urea from Alltech and Balchem, as well as other products.
The deal also removes some barriers limiting agricultural trade between the US and China. Most notably, China within three months will implement a phytosanitary standard that allows imports of US barley.
By Bede Heren
