A brief discussion on the five key characteristics of the fertilizer market in the first half of the year

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A Brief Discussion on the Five Key Features of the Fertilizer Market in the First Half of the Year Author/Source: Fertilizer Franchise Date: 2018-07-18 Clicks: 62 The fertilizer market in the first half of this year showed several key characteristics: declining production, reduced demand, decreased exports, overall price increases, and rising imports. 　　A Brief Discussion on the Five Key Features of the Fertilizer Market in the First Half of the Year I. Declining production. Affected by factors such as strict environmental regulations and insufficient raw material supply, fertilizer production declined in the first half of this year. **According to data from the Bureau of Statistics, in the first quarter of this year, China produced a total of 13.069 million tons of chemical fertilizers (on a pure basis, the same below), a decrease of 11.1% compared to the previous year. Of this amount, 8.531 million tons were nitrogen fertilizers, with a decline of 12.4%; 3.387 million tons were phosphorus fertilizers, showing a 7.2% drop; and 1.136 million tons were potassium fertilizers, with a 12.8% decrease. 　　II. Decreased demand. Due to factors such as low prices of agricultural products, low enthusiasm among farmers for planting, the use of organic fertilizers as a substitute for chemical fertilizers, and soil testing-based fertilization methods that reduce the amount of chemical fertilizers used, demand for chemical fertilizers is declining. According to industry statistics, in the first quarter of this year, China’s apparent consumption of chemical fertilizers amounted to 13.555 million tons, a year-on-year decrease of 7%. Specifically, nitrogen fertilizer consumption stood at 7.883 million tons, down 8.1%; phosphate fertilizer consumption was 2.925 million tons, down 4.2%; and potash fertilizer consumption reached 2.731 million tons, a decrease of 7%. III. Exports declined while imports also decreased. Due to the high production costs of fertilizers in our country, its competitiveness in the international market has declined, resulting in a drop in China’s fertilizer exports this year. According to customs statistics, in the first five months of this year, China exported a total of 7.124 million tons of fertilizers in terms of physical volume, a decrease of 17.9% compared to the previous year; the total export value was 1.88 billion US dollars, representing a 7.7% decline on a year-on-year basis. Exports of products such as urea and potassium sulfate have seen a significant decline. 　　IV. Prices are rising across the board. In the first half of this year, fertilizer prices reversed their downward trend from previous years and showed strong growth; prices for both simple fertilizers and compound fertilizers rose across the board, with nitrogen fertilizers experiencing the greatest increase, reaching new highs for the same period in nearly 5 years. According to monitoring by the China Agricultural Inputs Distribution Association, on June 18, the comprehensive index for China’s fertilizer wholesale prices was 2183.22 points, up 264.31 points on a year-on-year basis, representing a growth rate of 13.77%; the wholesale price index for urea in China was 2001.24 points, with a year-on-year increase of 18.13%; the wholesale price index for diammonium phosphate in China was 2817.15 points, showing a year-on-year increase of 6.21%; the wholesale price index for potassium chloride in China was 2081.10 points, with a year-on-year increase of 10.39%; and the retail price index for compound fertilizers in China was 2455.35 points, with a year-on-year increase of 8.26%. 　　V. Import volumes are on the rise. In the first five months of this year, China imported a total of 5.007 million tons of chemical fertilizers, representing a 15.1% increase on a year-on-year basis; the total import value was 1.34 billion US dollars, an increase of 24.9% compared to the previous year.