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What will be the trend of the fertilizer market next year? Author/Source: China Fertilizer Network Date: 2019-11-29 Clicks: 36 “This winter and next spring, the phosphate fertilizer market will be in a state of tight supply and demand balance; the operating rate of the nitrogen fertilizer industry may decline, and market prices will tend to stabilize. ”This is news from the 2019 annual meeting and standard review session of the National Technical Committee for Standardization of Fertilizers and Soil Conditioners SAC/TC105 and its fertilizer subcommittee, held on November 26-27. Precise fertilization is the way forward. Reducing the use of chemical fertilizers while improving their efficiency will remain a policy that China continues to pursue. Thanks to the achievements made in the innovation of fertilizer products in China, as well as the integration of agricultural machinery and farming techniques that has led to changes in fertilization methods, it has been possible to increase the efficiency of fertilizer use and reduce its total amount applied. In 2017, the fertilizer utilization rate for China’s major food crops reached 37.8%. In 2018, the total amount of chemical fertilizers used was 2.06 million tons less than in 2017, a decrease of 3.5%. Xin Jingshu, a leading expert at the National Agricultural Technology Extension Service of the Ministry of Agriculture and Rural Affairs, said that although certain achievements have been made, there are still problems. Issues such as high levels of fertilizer application, uneven distribution of fertilizers, low utilization rates of organic fertilizer resources, and an unbalanced fertilizer structure are the main factors restricting the development of this industry. According to Xin Jingshu, in terms of innovation in fertilizer varieties, China’s formulated fertilizers are more precise. Based on extensive field trials and in conjunction with soil testing data, China has developed fertilization formulas for different regions and crops. “At present, the area where soil testing-based fertilization techniques are applied across the country exceeds 1.85 billion mu-times, with a coverage rate of 85%; formulated fertilizers account for over 60% of the total fertilizer used for the three major grain crops. ”Guo Xinjingshu said that since formula fertilizers are more precise and tailored to local conditions, their promotion is carried out with greater intensity and at a faster pace. In the future, it is of utmost importance to improve the overall structure of agricultural inputs, reduce the use of chemical fertilizers and pesticides, increase the use of organic fertilizers, and ensure food security as well as income from key agricultural products. Xin Jingshu said that in the future, while ensuring agricultural production, China must persistently promote soil testing-based fertilization, increase the dissemination of efficient and green new types of fertilizers, and adopt integrated approaches to efficient fertilization. By reducing unnecessary fertilizer use, it is possible to gradually change the way fertilizers are applied in order to improve their efficiency and achieve sustainable agricultural development. The price of diammonium phosphate continues to fall. From January to September this year, a total of 12.71 million tons of P2O5 worth of phosphate fertilizers were produced across the country, representing a 3.0% decline compared to the previous year. From January to September, the country produced a total of 10.118 million tons of diammonium phosphate, a decrease of 2.9% compared with the previous year ； A total of 8.186 million tons of monoammonium phosphate were produced, a 1.1% decrease compared to the previous year; the supply and demand for phosphatic fertilizers are essentially in a state of tight balance. Xiu Xuefeng, vice president of the China Phosphorus Fertilizer Industry Association, said that the market will remain sluggish in the second half of the year, and large phosphorus fertilizer manufacturers will reduce their production levels accordingly; it is expected that the overall production rate in the industry will stay at around 60% in the fourth quarter. In terms of imports and exports, this year China’s imports of phosphate fertilizers have decreased while exports have increased; India’s import volume has risen significantly. According to statistics, from January to September this year, the country imported a total of 197,000 tons of phosphate fertilizer in terms of P2O5, a decrease of 12.1% compared to the previous year ； Nationwide, a total of 4.016 million tons of phosphate fertilizer equivalent to P2O5 was exported, representing a 9.5% increase on a year-on-year basis. In 2019, the economic situation at home and abroad was complex and volatile, leading to a significant decline in industry profitability. Xiu Xuefeng said that, according to statistics, the profit margin in the phosphate fertilizer industry is 1.8%, while that in the compound fertilizer industry is only 3.3%. Except for the increase in the production of heavy calcium carbonate, the production of all other products showed a downward trend. “In the future, due to factors such as growing concerns over a global economic downturn, increasing threats in the international market, a continuous decline in market competitiveness, heightened efforts to combat environmental pollution, and a persistent decrease in agriculture’s demand for fertilizers, there will not be many positive developments for the industry. At the end of October, the United States began to implement price adjustments, and it is expected that the price of diammonium phosphate will continue to fall. ” Overall, the phosphorus compound fertilizer market remains sluggish at present. From an international demand perspective, demand is declining and export prices are falling ； From the perspective of domestic agricultural demand, phosphate fertilizer consumption declined by 3.2%, indicating weak demand. Amid the overall downturn, Xiuxuefeng believes that China’s fertilizer industry should move toward being more efficient, environmentally friendly, and resource-saving. The utilization rate of nitrogen fertilizer production capacity may decline. According to statistics, from January to September this year, a total of 43.997 million tons of synthetic ammonia were produced nationwide, showing an upward trend compared to the previous year ； Urea production reached 42.009 million tons in terms of physical volume, representing a year-on-year increase of 4.5%. In terms of imports and exports, exports have increased significantly this year. From January to September, China exported 4.162 million tons of nitrogen fertilizers, a 32.2% increase on a year-on-year basis. Of this amount, 3.240 million tons were urea, representing a 188.4% increase compared to the previous year. India accounted for 40% of China’s total urea exports, making it China’s largest export destination for such products. Gao Li, deputy secretary-general of the China Nitrogen Fertilizer Industry Association, predicts that as the heating season arrives, natural gas supply will be better than in previous years. However, environmental regulations restricting production will become stricter, which may lead to a decrease in the utilization rate of nitrogen fertilizer production capacity. This will reduce the domestic supply of nitrogen fertilizers, thereby helping to improve the supply-demand balance and stabilizing market prices. Gao Li believes that as new tenders are launched in India, nitrogen fertilizer exports are likely to increase. However, due to the unfavorable situation in the chemical products market, the overall profitability of the nitrogen fertilizer industry is expected to decline significantly compared to the same period last year. From a positive perspective, the demand for urea in industries such as power shortage mitigation, wood-based panels, melamine, and automotive urea is on the rise, which will provide some support for the development of the nitrogen fertilizer industry in the future. Fertilizer standards serve as a benchmark for industry development. The fertilizer industry is currently going through a difficult period, but improving crop quality and ensuring crop health have become the most important challenges facing it. Ensuring the health of the end members of the food chain from the source has become the main focus of fertilizer development. To achieve this goal, fertilizer standards become one of the main means. Based on this, the National Technical Committee for Standardization of Fertilizers and Soil Conditioners bears a significant responsibility: to ensure the healthy and orderly development of the industry by revising and formulating certain standards, and ultimately submitting the drafts to the relevant authorities. The most important task at this meeting is to review the draft materials for the 14 fertilizer standards that are to be revised or formulated. The main standards reviewed at this meeting include: the revision of the national standard for “Calcium Magnesium Phosphate Fertilizer and Calcium Magnesium Phosphate Potassium Fertilizer”; the revision of the national standard for “Compound Fertilizers”; the revision of the national standard for “Sulfur-Coated Urea (SCU)”; the revision of the national standard for “Organic-Inorganic Compound Fertilizers”; the revision of the national standard for “Bulk Blended Fertilizers (BB fertilizers)”; the revision of the national standard for “Triple Superphosphate”; the establishment of a national standard for “Determination of arsenic, chromium, lead, cadmium, and mercury contents in fertilizers and soil conditioners”; the revision of the national standard for “Determination of arsenic, cadmium, lead, chromium, and mercury contents in fertilizers”; the establishment of an industry standard for “Ammonium Polyphosphate for Fertilizer Use”; the establishment of a national standard for “Determination of total nickel, cobalt, vanadium, selenium, antimony, and thallium contents in fertilizers by ICP method”; the establishment of an industry standard for “Stable Isotope Protium-Labeled Reagent – Trope-D9”; the establishment of an industry standard for “Humic Acid Soil Conditioners”; the revision of the national standard for “Micronutrient Foliar Fertilizers”; and the revision of the national standard for “Sulfuric Acid for Fertilizer Use”. More than 140 people attended the meeting, including members from the National Technical Committee for Standardization of Fertilizers and Soil Conditioners and its sub-committees on nitrogen fertilizers, phosphate compound fertilizers, potassium fertilizers, and new types of fertilizers, as well as representatives from standard drafting organizations and the media. Regarding the 14 fertilizer standards involved in this initiative, the committee members made every effort to discuss and exchange ideas, with the goal of ensuring that these standards better align with the development trends of the industry. According to incomplete statistics, this is already the third time that the committee members have held a collective discussion. Each member has done their best to carefully consider the testing methods and labeling procedures, striving to avoid any mistakes that could hinder the healthy development of the industry. As Shang Zhaocong, Secretary-General of the Standards Committee, said, **standards and industry standards are important tools for regulating the fertilizer market and protecting the rights and interests of enterprises, farmers, and consumers; they are also key to achieving greater efficiency while reducing fertilizer use, as well as to ensuring food safety and sustainability.** Gao Xiangzhao, a leading expert from the National Agricultural Technology Extension Service of the Ministry of Agriculture and Rural Affairs, also said that there is a downward trend in fertilizer use by farmers. According to statistics, the highest level of fertilizer use was recorded in 2015, with 60.05 million tons of fertilizers used that year; by 2018, the amount of fertilizer used had decreased by more than 2 million tons. At the same time, farmers’ demand for fertilizers is increasing. As agriculture has developed to its current stage, it is essential to ensure increased production, and improving quality is equally important; therefore, leading companies must assume social responsibility. “The formulation and revision of fertilizer standards are crucial for the development of the industry. Fertilizer standards should not only serve as a guide for technological progress in this sector, but also act as a foundation for improving agricultural productivity and quality. ”Gao Xiangzhao said lastly. The committee members agreed that the formulation and revision of standards must keep pace with the times and evolve alongside the development of the industry; such formulation and revision must be thorough and standardized, in line with the trends of societal progress. At this meeting, individuals who had made outstanding contributions to the Fertilizer Standards Committee were honored on site; Liu Gang was awarded the Special Contribution Award, while Li Chongming, Yang Bo, Zhang Juan, Gui Suping, Wang Lianjun, Sun Mingxing, and others were given the Outstanding Contribution Award.