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EU potash firms demand duties stay against Russia

Published 04/13/2011, 08:13 AM
Updated 04/13/2011, 08:16 AM
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* EU producers want potash duties on Russia,Belarus extended

* Potash importers, lawmakers worry about higher prices

BRUSSELS, April 13 (Reuters) - European potash firms have asked the European Commission to maintain import duties on potash from Russia and Belarus and protect European production of a crucial farming input, sources said on Wednesday.

EU producers want Russia's Silvinit and Uralkali to have duties of up to 27.5 percent imposed on sales to Europe for at least a further five years, rather than expiry of the measures this summer, European producers demanded, according to sources familiar with the case.

"The request for an extension has been submitted," said one of the sources.

A spokesman for German potash firm K+S had said the request would be lodged this week -- to meet a legal deadline on Wednesday.

The prospect of a tariff extension has triggered warnings by EU lawmakers of soaring fertiliser costs for cash-strapped farmers, with rising global food demand having turned potash into a sought-after commodity.

"The European Commission should examine the impact of continuing these measures, particularly with regards to farm production costs and food prices," four EU deputies said in a letter to the EU's trade and farm commissioners dated April 7.

"There is no substitute for potash in agriculture and it is therefore an essential product in order to maintain and expand food production."

EU Trade Commissioner Karel De Gucht, pressed on the issue at the European Parliament on Tuesday, defended the principle of duty extensions, even on products in tight supply.

"What we do is apply objective criteria in anti-dumping," De Gucht told EU lawmakers.

The European Potash Producers Association, which represents Germany's K+S and Israel Chemicals Limited operations in Britain and Spain, says duties are critical in stopping an unchecked flow of potash into the European Union at illegally low prices.

If the Commission accepts the request within the next three months as it is broadly expected to do, it has up to 15 months to decide on a duty rollover. During that time the duties, which were first imposed in 1992, will stay in place. (Reporting by Juliane von Reppert-Bismarck; Editing by Rex Merrifield)

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