Thread Content
**The National Development and Reform Commission issued a notice yesterday, urging price regulatory authorities in various regions to strengthen oversight of fertilizer prices in order to stabilize them, and made it clear that fertilizer companies under central government control are not allowed to raise prices. Securities analysts believe that this measure is intended to ease the pressure of rising agricultural product prices by controlling the prices of production inputs, and to reduce the high level of the consumer price index. **The National Development and Reform Commission emphasized that the ex-factory prices of urea produced by large enterprises under central management will not be adjusted ； For the ex-factory prices of fertilizers such as urea, diammonium phosphate, and compound fertilizers, which are regulated by local price authorities, if adjustments are necessary due to rising costs, the price authorities shall determine reasonable prices on the basis of a thorough review of those costs ； For the ex-factory prices of fertilizers that are not subject to price regulation, the systems for submitting applications for price increases and registering price adjustments shall continue to be implemented in accordance with relevant regulations. In addition, a markup rate on purchases and sales, a markup rate between wholesale and retail levels, or maximum price limits shall continue to be applied in the wholesale and retail sector of fertilizers; in principle, the overall markup rate from the factory to the retail level shall not exceed 7%. Wei Tao, an analyst in the chemicals industry at Guotai Junan, told a reporter from Morning Post that this move has had a certain impact on the fertilizer industry. “Currently, the cost of nitrogen fertilizers is around 1,500 yuan per ton. Since 2007, raw materials including coal have seen rapid price increases, raising the average industry cost by 100 yuan. Fertilizer manufacturers are not allowed to raise prices, which squeezes their profit margins. ” Wei Tao believes that the aim of curbing the rise in fertilizer prices is to control the costs of inputs used in agricultural production; this not only reduces the burden on farmers but also eases the pressure for an increase in agricultural product prices, thereby helping to bring down the currently high CPI. “As compensation for the manufacturing enterprises, price caps have also been imposed on electricity and natural gas supplied for their production. ” “Price controls have always existed; the key is how supervision will be carried out in the future. In fact, fertilizer prices are still rising in some areas. Furthermore, exports are also a crucial factor. Currently, the price of fertilizers in the international market is over 3,000 yuan per ton; if domestic fertilizer prices are too low, fertilizer manufacturers along the coast will inevitably increase their exports, leading to a relative shortage in the domestic market. ”Wei Tao said.