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Profit and loss figures for the fertilizer industry in 2016 are available! Author/Source: Southern Rural News Date: 2017-01-18 Clicks: 7 China is a large agricultural country, as well as a major producer and user of chemical fertilizers. According to Chen Qing, director of the **Key Laboratory for Efficient Development and Comprehensive Utilization of Nutrient Resources, the annual loss caused by the runoff of chemical fertilizers in China amounts to as much as 100 billion yuan. The chemical fertilizers remaining in farmland lead to problems such as soil compaction and hardening, reduced organic content, imbalances in trace elements, and crop pests and diseases, putting China’s agricultural environment under dual pressure from both external and internal pollution. China’s fertilizer companies also face the problem of insufficient innovation capabilities; in particular, the development and application of high-efficiency compound fertilizers are lagging behind, and they can no longer meet the requirements of the adjustment of China’s agricultural industry structure. The development of China’s fertilizer industry faces six major challenges: First, there is severe overcapacity, with additional production capacity continuing to increase ； II. The development of various types of basic fertilizers is unbalanced, their profitability is low, and competition is fierce ； III. Severe product homogenization and a mismatch between supply and demand ； IV. Low product utilization, high costs, and pollution ； V. The incentives for the fertilizer industry will be gradually removed, and regulatory oversight will also weaken; low prices of agricultural products have led to a sluggish market in the fertilizer sector ； VI. Policies aimed at reducing the use of chemical fertilizers while improving efficiency, as well as replacing them with organic fertilizers, are giving rise to new patterns in the fertilizer market. The industry is moving forward with difficulty, and competition is becoming increasingly fierce. The fertilizer industry also faces six types of competition: regional competition, cost competition, brand competition in terms of products and companies, capital competition, sales model competition, and competition over technology and human resources. For the entire fertilizer industry, profits were poor in 2016, showing a significant decline compared to previous years. Fertilizer and phosphate fertilizer are the two industries that have seen the most significant decline. http://p1.pstatp.com/large/152f0013b57a3792411e In such an environment, from the supplier’s perspective, it is necessary to consider reducing production capacity, adjusting the structure, improving services, and pursuing internationalization. From the distributor’s perspective, it is necessary to consider choosing the right products (innovative and efficient), strengthening promotion, and shifting to a service-oriented approach. The nitrogen fertilizer industry has suffered losses for three consecutive years. China plays an important role in global urea production; in 2016, urea prices experienced significant fluctuations. Chen Qing believes that this is a result of various factors such as market policies and demand. The nitrogen fertilizer industry has posted losses for three consecutive years; in 2016, the loss amount increased significantly. From January to November, the main business revenue of the nitrogen fertilizer industry reached 201.1 billion yuan, a year-on-year decrease of 12.7% ； The industry suffered a loss of 9.38 billion yuan, a 355% increase on a year-on-year basis. According to statistics, out of 284 nitrogen fertilizer manufacturers, 150 suffered losses, representing a loss rate of 52.8% ； The loss amounted to 14.24 billion yuan, a 49.5% increase compared to the previous year. Data source: IFA. Economic performance data of China’s nitrogen fertilizer industry from January to November 2016. Production of major phosphorus fertilizers declined on a year-on-year basis. China’s ammonium phosphate manufacturers are mainly located in Hubei, Yunnan, Guizhou, and Sichuan, while those producing diammonium phosphate are primarily found in Yunnan, Guizhou, and Hubei. Production data of major phosphate fertilizer types in China in 2016 (in 10,000 tons) (Huang Guorong)