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Fertilizer prices are falling. Whose fault is it—domestic or imported products? Author/Source: China Fertilizer Network Date: 2019-10-15 Clicks: 18 Since 2019, the price of potassium chloride has been on a downward trend. Currently, the price of conventional white potassium at ports is about 300 yuan lower than it was at its peak at the beginning of the year (prices are given per ton). Looking back at 2018, the price difference between the highest and lowest levels for conventional white potassium at ports was also only around 400 yuan. Recently, it is common to hear importers complaining in private discussions that the price of domestic potassium is too low, which drags down the prices of imported potassium; occasionally, some analyses also hold this view. Indeed, there is a causal relationship here, but it’s not entirely the case. So, who exactly is driving down the price of potassium chloride? In recent years, the annual consumption of potassium chloride has generally fluctuated around 14.5 million tons. Over the past five years, the average annual output of domestically produced potassium chloride in Qinghai has been approximately 7.2 million tons. This shows that domestically produced and imported potassium chloride each account for roughly half of the market share. On one hand, there is inevitably a certain gap in quality; coupled with the notion that “the moon seems rounder abroad,” on the other hand, potassium chloride imports have reached record levels in recent years. In the past five years, the average annual import volume has exceeded 7.8 million tons. Therefore, it is actually imported potassium that is the main cause of the oversupply. Currently, the total port inventory of imported potassium chloride has reached a record high of around 3.6 million tons. Apart from the increased availability resulting from delays in signing major contracts, as suggested by some domestic and international analysts, this situation is fundamentally linked to a slowdown or even negative growth in domestic demand, coupled with persistently high import volumes. It is understood that international potash prices continue to decline. Although major producers such as Canpotex and Uralkali have announced production cut plans involving a total capacity of over 3 million tons, it seems that in the short term this won’t change the fact that the market balance is gradually shifting in favor of buyers. Earlier, international reports suggested that a major contract with India would be finalized by the end of November, with the price expected to be at least 15 dollars lower than the previous contract price of 290 dollars. Recently, however, domestic rumors claim that India has already signed a new contract at a price of 260 dollars. Regardless of the reliability of these rumors, many in the industry have raised the question: \"Isn’t this price still quite high?\" ”Why? Since the framework for international potash prices was established last year, prices in the spot market have continued to fall more and more; in Brazil, another major market aside from China and India, the price of large-grain potash upon arrival at the port has dropped by as much as 45 dollars. In October, the price of new buyout orders for Salt Lake Shares was reduced, and the reduction was quite significant. However, although there are specific reasons related to issues such as “removal of financial distress status” and “bankruptcy reorganization,” the “compulsory nature” under current market conditions must also be acknowledged. It’s difficult to determine which of these factors is the most important; in reality, they influence each other. But setting aside the issue of shifting blame, does Salt Lake’s price cut also reflect a certain degree of \"forward-looking\" thinking regarding future market conditions? (Adu)