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The Market Picks Up And The Price Of Chemical Fertilizers Rises

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Since August of last year, affected by the comprehensive factors such as climate, epidemic situation, foreign trade, seasonal fluctuations, etc., the prices of the three major fertilizers of nitrogen, phosphorus and potassium have gradually increased. As of January 25 this year, the major raw materials have risen between 6.12% and 25%. Among them, nitrogen fertilizer increased the most (urea increased by 25%), phosphate fertilizer was second (58% monoammonium phosphate increased by 20.51%), and potash fertilizer was third (Russian red potassium also increased by more than 20%).


After analyzing the main reasons for the recent general increase in fertilizer prices: First, although the fertilizer industry has increased slightly in the past years, the supply is stable. Most compound fertilizer manufacturers and fertilizer trade distributors are not willing to store in winter, and they are based on the number of production orders. Purchase raw materials. Since the outbreak in January 2020, due to transportation obstructions, raw material companies have stopped production, resulting in some compound fertilizer manufacturers and traders being unable to obtain raw materials in early 2020, and production has stalled, which has disrupted the mix of compound fertilizer companies and trading distributors to a certain extent. Production and operation have a greater impact. At the end of 2020, the epidemic has recovered. In order to avoid the impact of the new epidemic, major compound fertilizer manufacturers and traders began to purchase and stock some raw materials for production. Market transactions were active and prices rose.




   The second is the shortage of raw materials for nitrogen fertilizer production. The initial raw material for nitrogen fertilizer production is ammonia. Domestic synthetic ammonia production enterprises mainly use natural gas or coal as the main energy source. Due to the influence of continuous cold air in December 2020 and January 2021, in order to ensure the normal heating of residents, priority is given to the supply of natural gas. Residents' use has affected the raw materials of synthetic ammonia production enterprises and caused the factory to stop production and increase the price.


   The third is the uncertainty of international trade, which has led to a shortage of domestic supplies of pyrite, sulfur, and coke, and prices have risen. The main raw materials for phosphate fertilizer production are sulfuric acid, coke, phosphate rock, etc. The price of raw materials for sulfuric acid and coke has risen, which has led to an increase in the price of phosphate fertilizer. Coke rose from RMB 1,878/ton on October 20 last year to RMB 2,548/ton on January 22 this year; sulfuric acid rose from RMB 381/ton on October 9 last year to RMB 569/ton on December 7 this year. It fell back to 462 yuan/ton on January 11.


  Fourth is insufficient potash fertilizer resources, and a large amount of foreign imports (Canada, Russia) are still needed. In early April 2020, the imported potash fertilizer (take potassium chloride as an example) was still fluctuating around 2000 yuan/ton, but at the end of April, domestic trade importers reached a major price adjustment agreement with Russian potash fertilizer manufacturers, and the price was reduced by US$90/ton (equivalent to RMB 500 yuan/ton), so that the price of imported potash fertilizer will drop significantly from May to August 2020, with a minimum of 1600 yuan/ton. As the price of new raw materials for potash fertilizer in Russia recovers, domestic potash fertilizer supply has stabilized, and the price has returned to around 2,000 yuan/ton. The increase in the price of potash fertilizer was mainly due to the adjustment of the import price in the previous period. The increase in domestic potash fertilizer supply was not large and was within a reasonable range.


  Fifth, it is affected by the epidemic abroad. The production of foreign fertilizer manufacturers has been affected, and domestic fertilizer exports have increased significantly, further driving domestic prices.


   Sixth, the price of the chemical fertilizer industry fluctuates periodically due to seasonal changes. Usually, it enters the winter storage of chemical fertilizers in October each year and starts to rise gradually. It reaches the peak during the peak period of fertilizer use from March to May each year, and then the price gradually declines. This price increase is also affected by the cyclical changes in the price of the chemical fertilizer industry.


   In order to further improve the spring plowing production, it is recommended that the majority of farmers and friends do the spring plowing and fertilizer preparation equipment in advance.


  Source: Comprehensively compiled from the Soil and Fertilizer Station of Guangxi Zhuang Autonomous Region

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