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The Sino-US trade war is beneficial to agriculture; why is it said that compound fertilizers are being sold off quietly? Author/Source: China Fertilizer Network Date: 2019-05-16 Clicks: 28 Recently, the much-talked-about escalation of the Sino-U.S. trade war has gained attention. On May 9, the U.S. Trade Representative’s office issued a statement raising the tariff rates on products covered by the 301 measures against China from 10% to 25%. China adopted a clear stance, stating that it was ready to negotiate or resort to conflict if necessary. In response, China’s State Council Tariff Commission decided to impose additional tariffs on certain imported goods originating from the United States, effective at 0:00 on June 1, 2019. The goods subject to additional tariffs include various fertilizer products such as urea, compound fertilizers, potassium chloride, and potassium sulfate. Fertilizers containing nitrogen, phosphorus, and potassium are subject to a 25% tariff imposed by the United States; details can be seen in the figure below. When this news was announced, there was great excitement across the country, especially among those in the fertilizer industry, who were particularly pleased. On one hand, China’s stance regarding trade wars is very firm ； On the other hand, this is a significant benefit for the domestic fertilizer industry; it’s especially good news for the domestic compound fertilizer sector, which suffers from overcapacity. This helps to improve the market situation for domestic fertilizer products, reducing the impact of cheap agricultural products imported from abroad, and thus allowing domestic agricultural products to gain greater market share. Of course, this will also have a positive impact on prices. It is now the time for people at the grassroots level in China to make money; it’s an opportunity to improve their financial situation. As a result, the use of fertilizers at these levels will increase, which in turn will boost the fertilizer industry and contribute to a positive development in the domestic fertilizer market. However, according to investigations by the editors of China Fertilizer Network, in recent days there have been instances in certain areas where compound fertilizer manufacturers have quietly tried to sell their stock, with this mainly affecting 45-sulfur general-purpose compound fertilizers. Some companies have sold small quantities of these products at prices as low as 2240–2270 yuan per ton; but this applies only to individual companies. As demand for compound fertilizers gradually declines in the first half of the year, it is normal for some companies to try to get rid of their remaining stock by selling it in small amounts. Meanwhile, most compound fertilizer manufacturers still maintain relatively stable pricing. That said, if this Sino-US trade war continues, it could bring about new developments in the fertilizer market in the second half of the year. There is significant demand for wheat fertilizers during the autumn and for winter storage purposes in China during that period; perhaps this trade war will lead to changes in the fertilizer market dynamics in the second half of the year. Let’s wait and see. (Yang Xiaomei)