Phosphate finds new way to reach the Prairies

Direct shipment from China is in response to the United States’ recent trade ruling victory against foreign producers

A Saskatoon company has opened up a new trade route for importing phosphate fertilizer into Western Canada.

Northern Nutrients Ltd. brought in a vessel from China that was being unloaded at the Port of Vancouver on April 8.

“To our knowledge, this is the first vessel of phosphate fertilizer destined for the Prairies to come through Vancouver,” said company founder Ross Guenther.

“Nothing ever comes in through the West Coast.”

The new trade route is in response to changing economics in the phosphate industry prompted by the Mosaic Company’s countervailing duty case against phosphate producers in Morocco and Russia.

The United States International Trade Commission recently ruled in favour of Mosaic, implementing countervailing duties against imported product that will remain in place for at least five years.

Josh Linville, fertilizer analyst with StoneX, said Canada has to figure out a way to stop using U.S. product in the wake of that ruling.

“The U.S. is going to be trading at a premium because of the countervailing duties that are now in place against 90 percent of world exports,” he said.

He anticipates more product from China, Russia and Morocco being shipped directly to Canada under the new trade dynamics.

“Where the economics may not have made sense before, when you’re talking about 20-plus percent duties, all of the sudden those economics make a little more sense,” said Linville.

Guenther said all of the phosphate sold by western Canadian retailers either comes from U.S. manufacturers like Mosaic, Nutrien and Simplot or is imported Russian and Moroccan phosphate shipped north from the Gulf of Mexico.

Retailers are nervous about the potential for rising prices and supply shortages now that shipments from Russia and Morocco to North America have been curtailed.

Some of them reached out to Northern Nutrients in November to see if the company could organize a shipment out of China.

Northern Nutrients has three years of experience importing Super S Sulphur fertilizer from South Korea through the Port of Vancouver, so it had the logistical contacts in place to attempt the deal.

Guenther said he reached out to a company he used to work for that owns a phosphate manufacturing plant in southern China and was able to arrange a vessel containing Polar 42, a product that is 42 percent phosphate and 10 percent sulfur.

He sent out an email to retailers once a deal was hammered out.

“We sent it out to our retail partners on Christmas Day and by Jan. 10 we had sold the entire vessel and it was done,” he said.

Ten retailers signed up for product including a number of independents, Federated Co-operatives Ltd. and one mainline grain company. All of the retailers are located in Saskatchewan and Alberta.

The vessel contained “thousands of tonnes” of product. Guenther believes the shipment will help keep prices in check in Western Canada.

“We were able to bring this in at a lower price than what the market was at the time we sold it all back in January,” he said.

Linville said Chinese phosphate can be of questionable quality at times but it can also be every bit as good as product from the U.S., Russia and Morocco.

“There is some material that comes out of China that is top-notch, world-class as long as it is watched very closely,” he said.

“If you’re watching it closely and it is shipped from where it is supposed to, there is some great product from the country of China.”

Guenther hopes this will be the first of many shipments on the newly established trade route, although the next one won’t likely occur until August or September.

“It’s getting pretty late to be honest with you, so we won’t have time for a second one this spring,” he said.

Northern Nutrients intends to bring in a new vessel every six to eight weeks starting in the fall.

He believes other companies will follow suit but it is difficult to find a supply of good quality Chinese phosphate and move it all the way to the Prairies.

Linville believes product from Russia and Morocco will also eventually start making its way to Canada through ports on the east and west coasts.

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