Four factors will push up the price of spring fertilizers next year
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Pulling prices in the international market. International agricultural product prices have continued to rise due to the continuous reduction in inventory and the strong demand for bio-energy industry. Among them, farmers in Brazil, the United States, and other countries have continuously increased their investment in agriculture due to the stimulation of the bio-energy industry. India, with a high subsidy from the central government, encourages farmers to increase fertilizer use. The above factors have caused a surge in the international fertilizer market. In the international market, the prices of raw materials for crude oil, natural gas and other fertilizers will remain at a relatively high price level, and the production costs of fertilizers will remain high. At the same time, international ocean freight charges will continue to rise, which will also increase the pressure of rising fertilizer prices in the international market. China is a big country in consumption of chemical fertilizers. The trend of increasing fertilizer prices in the international market will play a supporting role in the increase of fertilizer prices in the domestic market.
Fertilizer production costs increase. On the one hand, the prices of energy and raw materials necessary for fertilizer production have risen. In 2007, the price of coal, electricity, gas and other energy in the domestic market was under greater pressure. The ex-factory price of raw material monoammonium phosphate needed for production of fertilizers rose from 1,800 yuan at the beginning of the year to 3,100 yuan at present, and the price of sulphur rose more than 100%. . The increase in energy and raw material prices will certainly increase the production costs of fertilizer companies; on the other hand, the transportation costs of raw materials and products for fertilizer companies will also increase. From April 10, 2006 onwards, the uniform freight rate for railway freight increased by an average of 0.0044 yuan per ton-kilometer, and the average freight rate for railway freight rose from 8.61 min/tonne to 9.05 cents/ton-kilometer. The increase was 5.1%. In addition, on November 1, 2007, domestic gasoline, diesel and aviation kerosene prices increased by 500 yuan per ton. All these factors will lead to a certain degree of increase in transportation costs.
Fertilizer production is limited by lack of resources. China is a typical country that lacks phosphorus and potassium. At present, there is a serious lack of potassium resources, and production capacity can only meet 1/3 of domestic demand, and most of them rely on imports. As the quantity of potash fertilizer that can be controlled independently is too small, the price of potash fertilizer in the domestic market can only follow the price of imported potash fertilizer, resulting in the lack of discourse power in the pricing of potash fertilizer imports in China. China's phosphate fertilizer production can only meet about 70% of domestic agricultural demand, and the rest depends on imports. The import volume of diammonium phosphate products accounts for 25% to 30% of world trade volume.
The pull of exports is highlighted. The price of fertilizers at home and abroad is upside down, and the prospects for the fertilizer export market are promising. This makes fertilizer producers and distributors have a high degree of enthusiasm for exports. Taking the Indian market as an example, due to the high nitrogen fertilizer prices in the Middle East and Russia, China's nitrogen fertilizer prices are very competitive in the Indian market. The Indian market has become China's major export market for nitrogen fertilizer this year. The pull of fertilizer exports further exacerbated the shortage of chemical fertilizers in the domestic market and caused the trend of fertilizer prices to rise.
Relevant experts believe that the dramatic increase in fertilizer prices is not conducive to farmers increasing production and income, affecting farmers' enthusiasm for grain production, and thus affecting the country's food security. The relevant state departments should focus on the characteristics of supply and demand in the domestic chemical fertilizer market and combine China's chemical fertilizer industry structure to come up with more effective control measures. It is recommended to continue to control the export of fertilizer resources, prohibit the export of fertilizers such as urea and diammonium, and suspend the export tax rebates on urea, diammonium phosphate, and monoammonium phosphate; continue to impose seasonal tentative tariffs on urea exports and strictly control other fertilizer varieties. Exports, increase domestic fertilizer resources. At the same time, we should do a good job in the off-season commercial reserve of chemical fertilizers, strictly implement the sources of supply, ensure that the quantities are real, and have reliable quality, so as to ensure the supply of the fertilizer market.