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Can’t wait: Winter storage prices are already emerging before autumn storage is even complete? Author/Source: China Fertilizer Network Date: 2019-07-19 Clicks: 30 In mid-July, the market trends for compound fertilizers continued to advance earlier and faster. The first wave of marketing meetings related to autumn fertilizers had just concluded, while the use of wheat fertilizers would not start until October. In the Northeast region, preparations for winter storage have already begun quietly. Recent interviews by the editors of China Fertilizer Network have revealed that after July, some companies in the Northeast started setting prices for winter storage ahead of schedule – more than a month earlier than those companies that did so earliest last year. Why are the dates at which compound fertilizer prices are set advancing gradually? First, general-purpose compound fertilizers became the first to be \"sacrificed,\" followed by an expansion in the range of products affected. In recent years, it has become common for compound fertilizer manufacturers to introduce high-performance products. During the off-season in summer and autumn of 2018, some compound fertilizer companies in Hubei region offered 45% sulfur-based general-purpose compound fertilizers, with factory prices ranging around 2150–2180 yuan per ton. During the same off-season in 2019, some companies in Hubei repeated this tactic; meanwhile, other companies in various regions also followed suit. Some of these companies even introduced specialized fertilizers for autumn wheat cultivation, such as those with 42% chlorine content (formulations of 18:18:8 or 17:20:5), at factory prices of around 1900 yuan per ton. Specialized wheat fertilizers with lower nutrient contents offer better cost-effectiveness, which suits the demand for low-priced products among end-users in recent years. Secondly, the cake is only this big – who bids first will get the advantage? In recent years, the demand for compound fertilizers has been declining year by year. In the Northeast region, the area dedicated to soybean cultivation has increased, leading to a decrease in the demand for fertilizers. In some areas of the Central Plains, farmland is being converted back to forests, which has also reduced the area used for wheat cultivation. In the south, crayfish farming has become increasingly popular, while the area allocated to rice cultivation is decreasing. Additionally, many workers leave these areas to work elsewhere. It is an undeniable fact that the demand for chemical fertilizers is falling, and there is also increasing pressure to reduce the production capacity of compound fertilizer manufacturers. Overall, however, there is still an oversupply of such fertilizers. Therefore, those who can manage the timing of pricing and sales effectively will be able to gain an advantage and capture a share of the market. Once again, the demand for compound fertilizers is declining steadily, competition is intensifying, and the pace of capacity reduction is accelerating. I recall that a few years ago I mentioned that competition in the compound fertilizer market would become very fierce in the coming years, with price wars becoming the norm. This year, the prices of these popular products have remained high from the beginning of the year all the way through autumn and even into the winter storage period, which speaks volumes about the situation. Recently, some companies in the Northeast region have also introduced products designed for winter storage; for example, the factory price of 45% sulfur-based general-purpose compound fertilizers or those with a composition of (12:18:15) is around 2180–2200 yuan per ton. Some companies have even offered compounds with 48% chlorine-based slow-release properties, and such prices are indeed astonishing, reflecting the increasing competition in the compound fertilizer market today. Ultimately, price wars eventually turn into quality battles; behind the chaos in pricing lies a chaotic market situation. End-users find it increasingly difficult to understand the current situation in the compound fertilizer market, and they are even less willing to stock up on products in advance. Therefore, short-term gains mean little – long-term sustainable survival is what truly matters. (Yang Xiaomei)