Tariff increase blocked the export of fertilizer companies

Fertilizer companies are doomed this year to live through a policy changeable year. They have just recovered from power cuts and they have also been subjected to drastic changes in export tariffs, and the export road has been completely blocked. The domestic market has become the only way to go shopping.

On November 30, the Customs Tariff Commission of the State Council issued a notice on the adjustment of export tariffs for chemical fertilizers in 2010. In November, the tariffs for nitrogen fertilizers and phosphate fertilizers will be applied for 110% of peak season tariffs.

"Actually, the most direct intention of this round of tariff adjustments is to plug export fertilizers back into the domestic market, reduce the cost of agricultural production materials through supply and demand adjustments, and reduce agricultural product prices, thereby curbing inflation." Guodu Securities Chemical Industry Analyst Liu Fei said in an interview with a reporter from the "China Sankei Shimbun". He introduced that from January to September 2010, China's total urea exports reached 3.691 million tons, which is more than the total export volume in 2009. After entering October, the export volume of urea is still increasing.

Exporting chemical fertilizers “blocking” the domestic market will undoubtedly increase the domestic market supply. However, it is not good news for fertilizer companies. A fertilizer manufacturer, who asked not to be named, told the "China Sankei Shimbun" reporter: "The current adjustment of tariffs, the country may want to stabilize the market, worrying that the amount of fertilizer used in spring is not enough, but the actual situation is disturbed."

The person in charge said that fertilizer prices have been hovering low in the first half of the year, and the economic efficiency is very poor, and many companies are basically in a state of loss. From September to mid-November frequent frequent power cuts, it is even worse. "The cost of urea per ton has reached more than 2,000 yuan and the price and cost have been inverted. According to the original plan, December is a low-tariff period, the price is OK, originally wanted to produce more, make up for the loss of the whole year. Do not want to just open half In the past month, I have run into this situation."

In an interview with a reporter from the China Sankei Shimbun, Chang Chih-chih, a researcher in the chemical industry of China Investment Advisors, pointed out that the overcapacity situation in China's chemical fertilizer industry is relatively serious, and this year due to natural factors such as droughts and floods, the domestic market Fertilizer demand is limited. Therefore, most of China's fertilizer production companies are hoping to export off-season fertilizer.

The New Deal for Chemical Fertilizer Exports will limit the export of chemical fertilizers, which will shift the fertilizers originally used for export to domestic sales, thereby aggravating the competition in the domestic fertilizer market. In the future, the operating environment of China's fertilizer production enterprises will further deteriorate. “The production and operation of chemical fertilizer enterprises will be more difficult next year, and the economic benefits will be even worse. It is expected that nitrogen fertilizers will be depleted in the entire industry, and phosphate fertilizers will subsequently fall into losses.” Liu Shulan, vice chairman and secretary-general of China Nitrogen Fertilizer Industry Association, said in an interview with the media.

So, how should we find a balance between ensuring agricultural production and profitability of enterprises and achieving a win-win result?

“From the overall perspective of protecting the interests of farmers and ensuring national food security, we can understand this decision of the country. However, while the state is intervening in the fertilizer market, measures should be taken to intervene in raw coal prices so that the fertilizer industry can develop healthily. Maintaining the fertilizer market Long-term stability, protection of long-term interests of farmers, and ensuring national food security, so that the policy will not fail.” Yin Runsheng, deputy general manager of Shaanxi Luohe Coal Chemical Group Co., Ltd., said in an interview.

In recent years, as long as the fertilizer market fluctuates slightly, the country will immediately adopt measures such as restricting the maximum ex-factory price and increasing export tariffs to suppress fertilizer prices. As for the price of raw materials such as coal, which actually affects the production costs of chemical fertilizers and largely determines the price of chemical fertilizers, the intensity of state intervention is obviously insufficient, and it has even become completely market-oriented. Yin Runsheng suggested that while regulating the fertilizer market, the state should also give subsidies for rising raw material prices based on the annual output of chemical fertilizer companies and actual coal consumption, reduce the losses of fertilizer companies, allow more enterprises to operate normally, and increase the supply of chemical fertilizers.

Chang Yuzhi also stated that in order to ease the conflict between ensuring agricultural production and profitability of production enterprises, the Chinese government has adopted measures such as implementing preferential policies for fertilizer companies and increasing subsidies for farmers' agricultural resources. However, due to the poor implementation of policies, preferential policies and subsidies for fertilizers in the fertilizer industry have not been fully implemented in various regions. "In the future, the government must work hard to implement the policy."