International Fertilizer and Agriculture News - August 11

U.S. Extends but Narrows Jones Act Waiver

The Trump administration said it will continue waiving domestic shipping requirements under the Jones Act for 90 days, but oversight will be stricter than under the previous waiver. The waiver was first implemented on March 17. It now requires the Department of Defense to consult with the U.S. Maritime Administration (MARAD) on the availability of Jones Act vessels before individual voyages can qualify for the waiver, White House officials told Argus. This marks a change from the waiver valid through August 16, which relied on vessel operators or charterers to justify use of the waiver themselves. As of August 7, MARAD data showed that about half of the justifications for 212 Jones Act waiver voyages only mentioned that the cargo was covered under the waiver, while only 19 entries cited the unavailability of Jones Act vessels. According to officials, the new waiver still covers most previously included products, such as diesel, gasoline, crude oil, soybean oil, and fertilizers, but coal and coal-derived products are no longer allowed. U.S. shipping groups strongly opposed the waiver extension, especially under the broad waiver authority used since March. Former U.S. Federal Maritime Commissioner William Doyle wrote in an August 10 Washington Examiner column that “the government can respond to genuine emergencies without turning special waivers into a permanent invitation for foreign operators to enter routine domestic trade.”

The Trump administration issued the Jones Act waiver on March 17 under Section 501a on national security grounds. The waiver allows foreign-flagged and foreign-owned vessels to carry U.S.-to-U.S. cargoes instead of U.S.-flagged, U.S.-owned, and U.S.-crewed vessels, and it was later extended for 90 days. But some voyages conducted under the waiver have been criticized by the domestic maritime industry as inconsistent with national security purposes. The waiver was intended to ensure adequate fuel supplies for U.S. airports and military facilities, but it has also been very popular among U.S. refiners. Republican lawmakers urged Trump in July to restore the Jones Act, calling the waiver “a loophole exploited by hostile nations to undermine America’s maritime dominance.”

Lithuania’s Lifosa Phosphate Plant Suspends Production

Argus understands that EuroChem’s Lifosa phosphate plant in Lithuania has now suspended production of all products. The suspension could not be confirmed directly with the producer. But in late July, there were reports that Lifosa was preparing to halt production because of high raw material costs. The plant has annual capacity of 1 million tonnes of DAP/MAP/NPS, 220,000 tonnes of MCP feed phosphate, and 35,000 tonnes of tMAP processing capacity. News of the suspension prompted suppliers to raise DAP prices in Europe in the last week of July. But demand has been poor, and FCA prices of 870 euros/tonne in Germany and Benelux have so far failed to attract interest. Morocco’s OCP this week reported selling 8,000 tonnes of DAP/MAP output, equivalent at current exchange rates to FCA seaport prices in the low-to-mid 850s euros/tonne.