Beginning in December, domestic fertilizer products will encounter more stringent export restrictions. This new policy aims to control the possible increase in the price of new agricultural products due to cost promotion.
It is reported that the forthcoming policy will generally lower the export tax base price of major agricultural chemical fertilizer products. Among them, the offshore tax base price of diamine will be reduced from the current 4,000 yuan per ton to 3,400 yuan, the base price of an amine offshore tax will be lowered from 2,700 yuan per ton to 2,900 yuan, while urea may be maintained at the level of 2,100 yuan. change. It is alleged that under the new restrictions policy, if the offshore prices of fertilizer products are exported, the tax rate will gradually increase.
In addition, the restriction policy also shortens the window period for fertilizer exports, and the phosphate fertilizer products and urea products have been shortened from six months and six months to four months.
In the eyes of the fertilizer industry, the introduction of these restrictive policies means that the domestic chemical fertilizer export channels are basically blocked in the coming period. "Because, if calculated in accordance with the adjusted benchmark price, plus tariffs, corporate exports are a loss, and exports are equal to self-inflicted."
Restricting exports The fertilizer export restriction policy, from brewing to the formation of a final plan, was submitted to the State Council, which is less than a month before and after. At the end of October this year, with the nation's agricultural product prices ushering in a new wave of rapid and overall rises, the National Development and Reform Commission took the lead to jointly hold meetings with the Ministry of Industry and Information, the Ministry of Agriculture, and the Ministry of Finance to begin research on the deployment of interventions on fertilizer prices.
This situation is similar to the previous round of inflation in early 2008. At that time, the prices of domestic agricultural products began to enter the rising channel at the end of 2007. At the beginning of 2008, the inflation situation was already quite severe. On January 19, 2008, the National Development and Reform Commission issued the "Circular on Strengthening the Supervision of Fertilizer Prices", prohibiting price increases of urea, diamine, compound fertilizer, etc., and restricting exports.
However, the National Development and Reform Commission issued the "Notice on Reforming the Mechanism of Fertilizer Price Formation" in early 2009, announcing the removal of the restriction on fertilizer prices and changing the prices of chemical fertilizers from government-guided prices to market-regulated prices. This reform measure means that the National Development and Reform Commission will no longer be able to intervene in such ways as limiting the price of chemical fertilizers at will.
According to industry insiders, this is the main reason why the relevant authorities chose to restrict exports to stabilize domestic prices rather than directly limit prices. "Restricting exports and price controls may seem different, but the actual effect is the same."
On November 20, the State Council officially issued a document announcing the implementation of 16 measures to stabilize prices. Which clearly stated that "to control the export of chemical fertilizers, to adjust the export tariffs of chemical fertilizers, and to divide seasons during the busy season, to effectively implement the off-season reserves of chemical fertilizers and plan arrangements."
Sources said that the relevant authorities have reported to the State Council the specific plan to restrict fertilizer exports, and suggested that it be implemented from the beginning of December.
However, it is not clear in the program when the restrictions on the export of fertilizers will be terminated. Fertilizer industry professionals worry that restricting China's fertilizer exports will lead to an increase in global fertiliser prices, which will in turn affect the further rise of raw materials. Ultimately, fertiliser companies that need to import raw materials at a high price will not be able to support them.
According to the data from the National Development and Reform Commission Price Monitoring Center, in October, the price of urea in Hebei was 1,840 yuan per ton, and that of Anhui was 1,930 yuan, and the prices for the two provinces of diamine were 3,760 yuan and 3,550 yuan respectively. This price level is comparable to that in April and May 2008, and the price of diamine is even as low as around RMB 1,000. However, the prices of raw materials such as sulfur, natural gas, and coal have risen sharply.
Victims It is reported that after the National Development and Reform Commission took the lead to discuss the restrictions on the export of chemical fertilizers, the relevant departments held several meetings to discuss. Among them, the Ministry of Industry and Information Technology and fertilizer industry officials stated that they are opposed to restricting the export of chemical fertilizers because the fertilizer companies in the country have suffered a total loss from January to August this year, and their business operations have just improved. At this time, they restrict companies and are not conducive to industrial operations. At the beginning, the Ministry of Finance also disapproved of measures to limit fertilizer exports. The main reasons for limiting the export of fertilizers come from the National Development and Reform Commission, the Ministry of Agriculture and the China Cooperation Supply and Marketing Corporation. The reason is that the prices of agricultural products have risen too fast and need to be further controlled from the upstream.
In recent years, due to the severe overcapacity in the domestic chemical fertilizer industry, the price increase of raw materials such as sulphur and the increase in exports have been one of the main means for domestic fertilizer companies to make profits. It is estimated that in recent years, China's annual winter chemical fertilizer reserve is about 8-10 million tons. According to the statistics of the General Administration of Customs, in 2009, China exported 8.725 million tons of chemical fertilizers in 2008, and the export volume in 2008 exceeded 9.2 million tons.
However, in the forthcoming New Deal, the fertilizer industry, which has a severe excess production capacity and is subject to a significant increase in the prices of imported raw materials, can only return to the domestic market. The National Development and Reform Commission and the Ministry of Agriculture hope that this move will reduce the cost of agricultural products and thus weaken the future price of agricultural products.
However, people in the fertilizer industry said that the above restrictions are actually blocking the production capacity of fertilizers all over the country. They are forced to cut prices to reduce agricultural costs and expectations of rising prices. This will cause no harm to fertilizer companies. The source said, "The fertilizer industry has become the biggest victim in this round of inflation regulation."
It is reported that the forthcoming policy will generally lower the export tax base price of major agricultural chemical fertilizer products. Among them, the offshore tax base price of diamine will be reduced from the current 4,000 yuan per ton to 3,400 yuan, the base price of an amine offshore tax will be lowered from 2,700 yuan per ton to 2,900 yuan, while urea may be maintained at the level of 2,100 yuan. change. It is alleged that under the new restrictions policy, if the offshore prices of fertilizer products are exported, the tax rate will gradually increase.
In addition, the restriction policy also shortens the window period for fertilizer exports, and the phosphate fertilizer products and urea products have been shortened from six months and six months to four months.
In the eyes of the fertilizer industry, the introduction of these restrictive policies means that the domestic chemical fertilizer export channels are basically blocked in the coming period. "Because, if calculated in accordance with the adjusted benchmark price, plus tariffs, corporate exports are a loss, and exports are equal to self-inflicted."
Restricting exports The fertilizer export restriction policy, from brewing to the formation of a final plan, was submitted to the State Council, which is less than a month before and after. At the end of October this year, with the nation's agricultural product prices ushering in a new wave of rapid and overall rises, the National Development and Reform Commission took the lead to jointly hold meetings with the Ministry of Industry and Information, the Ministry of Agriculture, and the Ministry of Finance to begin research on the deployment of interventions on fertilizer prices.
This situation is similar to the previous round of inflation in early 2008. At that time, the prices of domestic agricultural products began to enter the rising channel at the end of 2007. At the beginning of 2008, the inflation situation was already quite severe. On January 19, 2008, the National Development and Reform Commission issued the "Circular on Strengthening the Supervision of Fertilizer Prices", prohibiting price increases of urea, diamine, compound fertilizer, etc., and restricting exports.
However, the National Development and Reform Commission issued the "Notice on Reforming the Mechanism of Fertilizer Price Formation" in early 2009, announcing the removal of the restriction on fertilizer prices and changing the prices of chemical fertilizers from government-guided prices to market-regulated prices. This reform measure means that the National Development and Reform Commission will no longer be able to intervene in such ways as limiting the price of chemical fertilizers at will.
According to industry insiders, this is the main reason why the relevant authorities chose to restrict exports to stabilize domestic prices rather than directly limit prices. "Restricting exports and price controls may seem different, but the actual effect is the same."
On November 20, the State Council officially issued a document announcing the implementation of 16 measures to stabilize prices. Which clearly stated that "to control the export of chemical fertilizers, to adjust the export tariffs of chemical fertilizers, and to divide seasons during the busy season, to effectively implement the off-season reserves of chemical fertilizers and plan arrangements."
Sources said that the relevant authorities have reported to the State Council the specific plan to restrict fertilizer exports, and suggested that it be implemented from the beginning of December.
However, it is not clear in the program when the restrictions on the export of fertilizers will be terminated. Fertilizer industry professionals worry that restricting China's fertilizer exports will lead to an increase in global fertiliser prices, which will in turn affect the further rise of raw materials. Ultimately, fertiliser companies that need to import raw materials at a high price will not be able to support them.
According to the data from the National Development and Reform Commission Price Monitoring Center, in October, the price of urea in Hebei was 1,840 yuan per ton, and that of Anhui was 1,930 yuan, and the prices for the two provinces of diamine were 3,760 yuan and 3,550 yuan respectively. This price level is comparable to that in April and May 2008, and the price of diamine is even as low as around RMB 1,000. However, the prices of raw materials such as sulfur, natural gas, and coal have risen sharply.
Victims It is reported that after the National Development and Reform Commission took the lead to discuss the restrictions on the export of chemical fertilizers, the relevant departments held several meetings to discuss. Among them, the Ministry of Industry and Information Technology and fertilizer industry officials stated that they are opposed to restricting the export of chemical fertilizers because the fertilizer companies in the country have suffered a total loss from January to August this year, and their business operations have just improved. At this time, they restrict companies and are not conducive to industrial operations. At the beginning, the Ministry of Finance also disapproved of measures to limit fertilizer exports. The main reasons for limiting the export of fertilizers come from the National Development and Reform Commission, the Ministry of Agriculture and the China Cooperation Supply and Marketing Corporation. The reason is that the prices of agricultural products have risen too fast and need to be further controlled from the upstream.
In recent years, due to the severe overcapacity in the domestic chemical fertilizer industry, the price increase of raw materials such as sulphur and the increase in exports have been one of the main means for domestic fertilizer companies to make profits. It is estimated that in recent years, China's annual winter chemical fertilizer reserve is about 8-10 million tons. According to the statistics of the General Administration of Customs, in 2009, China exported 8.725 million tons of chemical fertilizers in 2008, and the export volume in 2008 exceeded 9.2 million tons.
However, in the forthcoming New Deal, the fertilizer industry, which has a severe excess production capacity and is subject to a significant increase in the prices of imported raw materials, can only return to the domestic market. The National Development and Reform Commission and the Ministry of Agriculture hope that this move will reduce the cost of agricultural products and thus weaken the future price of agricultural products.
However, people in the fertilizer industry said that the above restrictions are actually blocking the production capacity of fertilizers all over the country. They are forced to cut prices to reduce agricultural costs and expectations of rising prices. This will cause no harm to fertilizer companies. The source said, "The fertilizer industry has become the biggest victim in this round of inflation regulation."
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