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The nitrogen fertilizer industry makes every effort to stabilize prices and ensure supply for spring plowing. Author/Source: Sinochem New Network. Date: 2021-03-23. Clicks: 33. From March 17th to 18th, 2021, a meeting on the analysis of the spring nitrogen fertilizer market situation was held in Tai’an, Shandong. More than 350 representatives from nitrogen fertilizer industry associations, as well as companies involved in production, trading, logistics, and futures, believe that stabilizing prices, ensuring supply, and supporting spring plowing have become the top priorities for the nitrogen fertilizer industry at present. At the meeting, Gu Zongqin, president of the China Nitrogen Fertilizer Industry Association, said that the supply of fertilizers and price stability during spring plowing are crucial for food security, farmers’ enthusiasm for growing crops, and the overall goals for annual food production. Facing the situation of a recovering world economy, strong demand for international nitrogen fertilizer markets, increasing demand for agricultural nitrogen fertilizers in China, and a gradual recovery in demand for nitrogen fertilizers in non-agricultural sectors, nitrogen fertilizer manufacturers have the responsibility and obligation to organize production properly. They must not only ensure the safe and stable operation of their facilities but also increase nitrogen fertilizer production as much as possible to meet the needs of spring farming. According to Tian Youguo, head of the Fertilizer Quality Monitoring Department at the National Agricultural Technology Extension Service Center, in 2021 the Ministry of Agriculture and Rural Affairs set a clear goal of maintaining the sown area for grain crops at over 1.75 billion mu, and ensuring that grain production remains above 650 million tons. Given the extremely challenging situation in agricultural production, China’s demand for agricultural fertilizers this year is estimated to be around 51.46 million tons, of which 25.66 million tons are expected to be needed for nitrogen fertilizers (pure nitrogen, the same applies hereafter). Industry enterprises should organize nitrogen fertilizer production properly and make every effort to ensure the safe and stable operation of production facilities. Currently, the price of urea in China is at a high level of 2,100 yuan per ton. Statistics to be released at the meeting indicate that the new nitrogen fertilizer production capacity that will come online in the future is likely to help stabilize prices. According to statistics from the China Nitrogen Fertilizer Industry Association, China will see an increase in urea production capacity of 2.8 million tons this year, of which 1.6 million tons will come online in the first half of the year. This includes 500,000 tons from Jiujiang Xinlianxin, 800,000 tons from Hubei Sanning Chemical, and 300,000 tons from Yunnan Xiangfeng. According to statistics from the UK’s Crop Research Unit (CRU), an additional 6.14 million tons of urea production capacity is expected to be added abroad this year. In response, Gao Li, deputy secretary-general of the China Nitrogen Fertilizer Industry Association, said that the new urea production capacity being brought online will be beneficial to the development of the industry; it will play a positive role in stabilizing urea prices during the spring planting season and meeting market demand. At the same time, he suggested that nitrogen fertilizer manufacturers should make every effort to ensure supply within the country during the first half of the year, reduce exports accordingly, and prioritize allocating nitrogen fertilizer resources to the domestic market during the spring plowing season. Many of the attendees also believed that only by working together, both upstream and downstream in the fertilizer industry, can overall price stability and a stable supply be ensured, thereby enabling an ecological cycle between these different sectors. Zhang Jincheng, president of the Shandong Province Fertilizer and Coal Chemical Industry Association and chairman of Luxi Group, suggested that production units and distribution companies share information and exchange insights in order to work together to ensure proper production and supply of nitrogen fertilizers for spring plowing as well as throughout the year. Mao Guobin, deputy general manager of Hubei Sanning Chemical, said that establishing a sound ecological chain between the upstream and downstream sectors of fertilizers is necessary to boost market confidence. As the upstream supplier of compound fertilizers, urea manufacturers should build mutual trust with compound fertilizer companies. Agriculture-supporting enterprises can only ensure a good agricultural harvest throughout the year by working together to stabilize prices and guarantee supply. As a distributor, Miao Hongde, general manager of Zhejiang Agricultural Inputs Group Huiduoli Agricultural Inputs Co., Ltd., hopes that large state-owned trading enterprises will take the lead in ensuring a stable supply of nitrogen fertilizers. Manufacturing enterprises with the necessary resources can also set up warehouses in the main markets for their products to store nitrogen fertilizers, which helps improve the capacity to supply these fertilizers in emergency situations and prevents sharp fluctuations in prices caused by concentrated shipments or market hesitation. Some delegates also believed that when the prices of fertilizers rise, fraud and counterfeiting tend to increase; therefore, efforts to combat fraud in agricultural inputs should be intensified in order to stabilize prices and ensure an adequate supply, thereby purifying the market. In addition, the industry should also strive to improve the utilization rate of nitrogen fertilizers, and actively explore the use of futures instruments to manage operational risks. According to estimates by the China Nitrogen Fertilizer Industry Association, domestic nitrogen fertilizer production during this spring plowing season was 15.25 million tons, a 4.1% decline compared to the previous year. Based on the usual net export volume of 2.2 million tons during the same period, and after accounting for 3.7 million tons required by industry, it is estimated that 9.35 million tons of nitrogen fertilizer will be available to meet domestic agricultural needs. This is roughly in line with the Ministry of Agriculture and Rural Affairs’ forecast of around 8 million tons of nitrogen fertilizer demand for this year’s spring plowing. The conference was hosted by the China Nitrogen Fertilizer Industry Association, with Wang Liqing, the secretary-general of the association, serving as the chairperson.