(March 17): The Trump administration has moved to locate backup sources of fertilisers for American farmers at the start of the planting season after the Iran war shut down a key source of supply.
“We’ve been all over the fertiliser problem,” White House National Economic Council director Kevin Hassett said on CNBC Tuesday. “I’m not saying that we can eliminate what disruption there is so far but we can minimise it for sure.”
Hassett said the US has “established licences for Venezuela to produce more fertiliser" and has held discussions with Morocco. The administration has been engaged “as an insurance policy against disruption", he said.
While Hassett cited Morocco as having the world’s largest reserve of potash, data compiled by industry experts show the North African nation to have the biggest phosphate rock reserves while its potash endowment is relatively small compared with those of Canada or Russia. The US currently has duties in place on Moroccan phosphate, which are under review. Pleas from US farm groups to remove those fees ramped up after the war began.
The focus is getting supplies to American farmers, Hassett said. “It’s almost planting season and there’s a lot of fertiliser that usually goes down.”
Fuel supplies
See also: UN warns prolonged Iran War could trigger record global hunger
One facility in Qatar had produced so much fertiliser that it supplied “maybe about 20%” of the US market, according to Hassett. The Iran conflict has mostly shut the key Strait of Hormuz passage for ships, however, leaving energy and other resources bottled up in the Gulf.
The NEC chief also said that officials are examining options to help maintain the supply of refined energy products to the West Coast of the US.
“Asian economies, which are much more reliant on Middle East oil, actually sell a lot of refined product to the West Coast of the US,” Hassett said. “We’re seeing some signs that they might be pulling that back to make sure that they have enough energy for themselves.”
See also: China restarts soybean auctions as it continues to buy from US
The situation means “we might have to move a few chips” on the figurative playing board, he said.
Consumer help
Overall, the US economy is “fundamentally sound” at this point, Hassett said. He echoed US President Donald Trump on the timeline of the war, saying that it would be over “in the short run".
If the conflict “were to be extended, it wouldn’t really disrupt the US economy very much at all", Hassett added. At the same time, “It would hurt consumers and we’d have to think about — if that continued — what we would have to do about that.”
Alluding to how the conflict has delayed Trump’s trip to China to meet with Chinese President Xi Jinping, Hassett also said that “when this war is over, which will be sometime soon, I’m sure they’ll get together and have a lot to talk about”.
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