ITC ‘Brushed Aside’ Major Weather Events, Improperly Investigated Reshipment, Fertilizer Exporter Says

The International Trade Commission did not properly investigate the actual feasibility or frequency of reshipping excess phosphate fertilizer during a year in which fertilizer supply chains were rocked by unusual events, foreign exporters and domestic importers told the Court of International Trade May 8 in comments opposing a continued affirmative injury finding by the ITC after a remand (OCP v. U.S., CIT Consol. # 21-00219).

Exporters led by Moroccan supplier OCP said that the ITC’s analysis of domestic reshipment practices was flawed. Most of the time, inventories that have been delivered are not reshipped again, even if they end up exceeding demand, OCP said.

It said that the ITC’s recent questionnaires, issued after Court of International Trade Judge Stephen Vaden ordered the commission to look into domestic reshipment more closely before basing its injury determination on the possibility of it (see 2309190060), were poorly worded to elicit relevant information. Those questionnaires were instead “designed to validate its presumption that inventory shipments in general are normal industry practice -- a point that is not contested and irrelevant to the Court’s remand,” OCP said.

For example, the commission asked questions about domestic producers’ “inventory operations,” “distribution networks” and “modes of transportation used to distribute shipments” without actually defining those terms, the exporter said. It said another question asked the producers if they had ever moved fertilizer “from one inventory location in the United States to another” without clarifying that the first location noted was supposed to refer to an intended destination.

Questionnaire responses still showed that reshipment was rare, the exporter said.

“Remarkably, the Commission cites to domestic producer questionnaires with only scarce examples of possible reshipments to support its finding that the reshipment of inventories is standard practice for the domestic industry,” it said.

OCP also argued that the ITC had understated the “supply shortfall” caused directly prior to the period of review by a domestic producer’s idling of a large plant. Prior to OCP’s petition, the producer’s CEO had said that the company “gave up 1 million tons” of sales, but during the investigation it told the ITC it had only lost 700,000 short tons, a “self-serving” figure that the ITC accepted, the exporter said. And it said the commission “continues to discount evidence” that domestic producers often refused to sell to some U.S. purchasers, resulting in a greater demand for imports.

And it said that the commission “brushed aside these successive, once-in-century weather events that nobody could have anticipated” to claim that importers should have “reacted more quickly” and stopped buying fertilizer from overseas.

“In effect, the Commission takes issue with a condition of competition in the fertilizer industry -- that orders are placed based on projected demand -- and blames subject imports for that industry practice, even though all market participants (regardless of source) operate the same way,” it said.