Fertilizer industry scrapes "Customs Tariff"

From September 1, 2008, special export tariffs on nitrogenous fertilizers and synthetic ammonia will be raised to 150% and implemented until December 31, 2008;
From October 1st to December 31st, 2008, a special export tariff of 100% will continue to be imposed on other fertilizers and fertilizers other than the above two products.
- Excerpted from the "Notice of the Customs Tariff Commission of the State Council on Adjusting Special Export Tariffs for Chemical Fertilizer Products"
When several rumors have been turned into reality this year, relative to the 100% special tariff in April, the industry has already had sufficient psychological preparations for September’s “tariff hurricane”. After the official announcement of the tariff policy, the enterprises have complained less and have more rational thoughts.
Although companies have realized that under the new tariff policy, if the country does not adopt relevant supporting policies to support enterprises, companies will face numerous difficulties and even death and death tests, but before protecting the domestic resources and protecting the interests of farmers, the majority The company still showed its overall awareness.
At the same time, some industry officials also pointed out that tariff policies are only a means of protecting resources and ensuring domestic supply. From the effects of adjusting tariffs several times, although there is some restraint on fertilizer exports, the company’s cost pressures and excess production capacity, etc. The problem cannot be solved, and relying solely on tariff policies will not be able to fundamentally resolve the sharp contradictions existing in the current market; solving market conflicts, the long-term nature of national policies, forward-looking nature, and supporting policies for farmers' income are crucial. In this regard, this publication will continue to publish exciting analysis of celebrities inside and outside the industry, jointly taking the fertilizer market.
Zhang Xinya, deputy general manager of Hubei Yihua Group:
The increase in the price of urea is considered by many to be the driving force of exports, but in reality, the main reason is that the price of raw materials such as coal has been rising. Exports are only a secondary role. Such an export policy will only make domestic companies even more uncomfortable and even stop. However, it still cannot solve the problem of farmers buying cheap, high-quality fertilizers.
The price of the product is determined by the cost. Phosphorus compound fertilizer is also the same, there is no high pressure export policy, the price will rise. The cost of diammonium phosphate has exceeded 4,500 yuan/ton, and the average cost of 45% potassium sulfate compound fertilizer is around 4,000 yuan/ton, which is mainly driven by the price of raw materials such as sulphur. The price in the international market is also very high now. If the country lowers the tariff, enterprises can also use the profit from exports to subsidize their own farmers. In addition, the state can directly subsidize farmers by directly collecting tariffs. If the diammonium phosphate 4,600 yuan / ton, according to 4,100 yuan / ton to sell, it is not realistic, only stop production. The current situation is that the fertilizers used to limit exports are not produced by the manufacturers. Now they are forcing production cuts. There will not be too many sources of supply. How will prices fall? Therefore, the current situation is such that enterprises are very difficult and difficult, and farmers have not really benefited.
Huang Xiancheng, Deputy General Manager of Huangmailing Phosphorus Chemical Group Co., Ltd., Hubei Province:
From the perspective of protecting resources, the country should adopt this policy.
However, for the industry, due to overcapacity, regardless of nitrogen fertilizer or phosphate fertilizer, the domestic market oversupply, completely curb exports, will lead to more intense competition in the domestic enterprises, the consequences of loss competition is both the loss of the company and the country's losses. The state should properly implement the export quota system while ensuring the production cost of the enterprise, reduce the losses of enterprises and industries, and avoid the waste of funds and resources.
Another serious situation facing the industry is that, on the one hand, the country has continuously introduced new tariff policies to control exports. On the other hand, some new production capacities are still being deployed and expanded. The market's production capacity has far exceeded the market demand. From this aspect In a word, the state should make reasonable control and configuration of the industry planning, or set relevant thresholds, and control the increase or decrease of production capacity according to the actual demand of the domestic market, making the national policy more clear and the management effectiveness more practical. In the next step, the problems that companies must face are the integration of resources, the integration of factories, and the optimization of resource structure.
Mr. Li Zhenqi, Director of Sales, Hubei Dagukou Chemical Co., Ltd.:
The introduction of the new tariff policy has clearly demonstrated the country’s attitude that it must resolutely eliminate exports and its direct purpose is to ensure domestic supply; and the more far-reaching significance lies in the protection of domestic resources. I personally think that the introduction of the policy is correct. Judging from the role and impact, the introduction of the new policy has almost eliminated the possibility of exports and can play a role in alleviating domestic supply shortages.
However, whether policies can fundamentally promote the role of agricultural production still remains to be seen. On the one hand, fertilizer prices are directly related to national policies. Now, the supply of phosphorus compound fertilizer raw materials has been relatively stable, and sulfur resource prices are decline. According to the law of normal market reaction, this kind of cost reduction will be reflected in the next year. The price has dropped to last spring and prices still need to wait for a while. Second, whether fertilizer prices can meet farmers' expectations and promote farmers' awareness of farming will still be affected by the cost of chemical fertilizers. Now, the cost of fertilizer products is not low, and the prices fall below the cost. The possibility is very small, can the farmers withstand? Only when the price is low, people can start to use fertilizer; Third, the state’s measures on farmers’ grain prices can support farmers’ income and it’s very important. If the income of farmers still maintains the status quo, then the effect on the status quo of agriculture can be reversed. It's hard to say.
After the role of the policy of the previous stage and the release and expansion of production capacity last year, the domestic competition for phosphate and compound fertilizer has become relatively hot. At present, the operating rate of the entire industry is only about 70%. According to this situation, the company may experience a difficult transition period in the second half of this year, at least until the first half of next year. This kind of situation will promote the new integration of the industry, and the new integration will be tilted from the resources, funds, brand, technology, including management to the dominant enterprises.
Kaimenzi Agrochemical Co., Ltd. Chairman and General Manager Fang Qiubao:
I support the country's policy of implementing export restrictions. Although prices have not fallen much, if there are no export restrictions, prices will now be higher. This is true of urea, diammonium phosphate, and ammonium chloride. After this round of coal price hike, the production cost of urea is higher and it has already exceeded 2,000 yuan/ton. If the price is not controlled, the market price will be higher. Even if the cost reaches 2300-2500 yuan/ton, the factors of tight coal power will determine the shortage of urea supply. At this time, it will be even worse if it is re-exported. Therefore, I am in favor of the new export policy for urea.
The export of phosphate fertilizers has made the domestic market and the international market in a relatively balanced state. The tariff rate of the country is reasonable. After September, the tariff is relatively high. This is also rational, because China does not need to pull down the price of phosphate fertilizer in the world. At the same time, it will not lift domestic prices.
Some grassroots distributors:
According to the survey of grassroots dealers by this reporter, after the implementation of the new tariff policy on September 1, the domestic urea market maintained a continuous downward trend, prices in Shandong and Hebei dropped significantly, and the mainstream shipping price has dropped to 2200-2220. Yuan, compared with last week, the price drop can reach 150 yuan, but the sales situation is normal, and the downward trend of prices is still obvious. The psychological defense of manufacturers is generally set at a level of 2,200 yuan/ton, but from the current point of view, there is still a downward trend.
In Henan, local urea has fallen by more than 100 yuan from the previous period, and part of the urea entering the Henan market has dropped by about 200 yuan. The impact of tariff increases has become apparent. Dealers believe that the price of urea will decline further in the future if the international market The price of urea will not rise too much. The door to urea exports may be shut down. As a result, some of the urea in the Port Bonded Zone may be returned to the Mainland, increasing the supply of the mainland market, and the trend of urea decline may be It will be further aggravated; and even if the international urea market prices rise further, the country will have a whole set of new measures to deal with, so the second half of the urea price should show a stable or falling market.

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