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Fertilizers: The fertilizer market remains in a downturn. Time: March 23, 2009, 15:57. Author: jmmhg. There is insufficient momentum for price increases in nitrogen and phosphorus fertilizers. News tip: With the preparations for spring plowing, a process of preparing fertilizers from south to north has brought about a slight increase in demand in this otherwise sluggish fertilizer market. However, based on the companies interviewed by the journalists, it will still take some time before the fertilizer market recovers. Currently, trading in the international and domestic fertilizer markets remains sluggish. The rise in the prices of nitrogen and phosphorus fertilizers seems to be a feint, while negotiations regarding potash fertilizers have not yielded any results yet. Industry experts believe that Belarus’s decision to reduce the price of potash fertilizers exported to Brazil by 25% is not necessarily a sign of a decline in potash prices; it will still take some time before the prices of imported potash fertilizers become clear. In the warm months of March, when it’s time to start spring plowing, the fertilizer market should be able to overcome the harsh winter and welcome the warmer spring. However, things have not turned out as expected; based on interviews with companies in this sector, it will still take some time before the fertilizer market sees a revival. Nitrogen and phosphorus fertilizers: Price increases are just a feint. After the downturn last year, it was thought that the peak season for fertilizer use during spring plowing would bring optimism to the industry, but the words of Director An from the Fertilizer Factory in Wutai County, Shanxi, dampened the industry’s hopes. “The current fertilizer market can still be described as sluggish, and our factory is currently shut down for maintenance. ”Director An said. He said that aside from the rise in local fertilizer prices during the \"**\" period, the fertilizer market did not get off to a good start at the beginning of the spring planting season in 2009. “Currently, the price of urea has dropped again, with the market price being around 1,800 yuan per ton, which is below the cost price. Our factory managed to ship all the goods within less than two weeks during the ‘**’ period, and now it is shutting down for maintenance. ”Director An said in an interview with reporters on March 18. In his view, even during the “**” period, urea prices only fluctuated above the cost level, leaving companies with little profit. The manager of a medium-sized fertilizer company in Yantai, Shandong, which has previously received provincial-level honors, complained bitterly in an interview with reporters. “About 80% of the chemical fertilizers sold on the market today are fake. The limited purchasing power of farmers forces them to turn to the market for cheap fake fertilizers, and companies like ours that refuse to sell such fake fertilizers simply cannot survive. ”In an interview with reporters on the 18th, the official declined to be named. She revealed that the so-called fake fertilizers are those with insufficient nutrient content; taking phosphate fertilizers as an example, a bag of qualified phosphate fertilizer labeled as containing 50 units of nutrients should cost at least 180–190 yuan, yet some manufacturers sell it to farmers for only 90 yuan, which is clearly evidence of fraud. “Fertilizers usually labeled as containing 50% of the stated ingredient actually contain only 30%; the difference is around 90 yuan per unit. As far as I know, this problem of fake fertilizers crowding out genuine ones exists not only in Yantai but also throughout Shandong Province and even across the whole country,” said the official. “The anti-counterfeiting efforts by relevant authorities have not managed to completely eliminate fake and substandard agricultural supplies from the market. In some areas, such practices even encourage the production of fake agricultural supplies. Once companies involved in these issues are discovered, they are simply fined and then continue to engage in such illegal activities.” ” Based on current market prices, urea prices in the domestic market have recently risen to levels seen at the beginning of last year, and phosphate fertilizer prices have also increased. However, based on interviews with journalists, companies remain pessimistic about the market outlook. On this matter, Xu Wenfeng, a researcher in the chemicals industry at Guodu Securities, said that the rise in prices of nitrogen and phosphorus fertilizers is due, on the one hand, to seasonal factors – the need for fertilizers during spring plowing leading to a peak in market demand – while on the other hand, speculation by distributors who raise prices could also be a factor. Furthermore, due to a mismatch between production and consumption, it is also possible that fertilizer prices in certain areas rise as a result of regional factors, since the fertilizer produced in those areas has not yet been shipped out by the time it is needed for use there. “The international market has remained sluggish since the beginning of this year. First is the urea market; in four words, it can be described as a lack of hope for improvement. ”Xu Wenfeng said. He analyzed that although demand for urea in South Asia has been strong recently, supporting international urea prices in the short term, in the long run, over the next one or two months, the international urea market is unlikely to see any improvement due to an oversupply situation. The phosphate fertilizer market is primarily supported by demand from India. Estimates suggest that India required over 10 million tons of diammonium phosphate between April 2009 and March 2010; of this, about 4 million tons were produced locally. As of the end of March this year, inventory levels were around 400,000 tons, meaning that another 6 million tons needed to be imported. Apart from India, there is a demand for phosphate fertilizers in Europe and Latin America as well, but due to the small volume and scale, it cannot serve as a major factor supporting the market. Due to the sluggish conditions in the international market and the peak season for fertilizer use domestically, in accordance with the fertilizer export tariff policy implemented by the National Development and Reform Commission last year, high tariffs are imposed on fertilizer exports during this peak season; therefore, fertilizer companies currently focus their efforts mainly on the domestic market. Negotiations over potassium fertilizers have reached a stalemate; compared to nitrogen and phosphorus fertilizers, the price of potassium fertilizers has remained relatively stable. Although its price also dropped along with overall fertilizer prices in the early stage, it later experienced a period of rapid increase. In the past two weeks, the market price of potassium chloride in China has returned to stability, with trading volumes starting to decline. In addition to the quotes from large distributors: 4,300–4,350 yuan per ton for red potassium and 4,500 yuan per ton for white potassium, Salt Lake Potash (58.60, 5.08, 9.49%) also offered a factory price of 4,200 yuan per ton for domestically produced potassium chloride. However, due to its high price, almost no one placed orders for it. Since our country relies heavily on imports for potash fertilizer, the annual price negotiations between domestic and foreign suppliers of potash fertilizer attract considerable attention. Recently, Belarus significantly reduced the price of potash fertilizer exported to Brazil; the adjusted price is $750–756 per ton, and this new price is valid from March to May 2009. Reporters learned from relevant officials at the China Minmetals Chemicals Import and Export Chamber that as of now, the price of potassium fertilizers exported by Belarus to our country has not been adjusted, and negotiations regarding these fertilizers are still ongoing with no substantial progress yet. The reporter learned from relevant sources that the Chinese side hopes for a certain degree of decline in the import prices of potash fertilizer in 2009 compared to the previous year, while the foreign parties prefer to maintain the prices from 2008. To maintain prices, world potassium fertilizer giants such as Belaruskali and K+S have adopted measures to reduce production. China is not to be outdone either. Data released by the Potash Industry Branch of the China Inorganic Salt Industry Association show that since the potassium fertilizers imported into the country the year before last were not fully used up, and although imports last year amounted to only around 5.4 million tons, the total remaining stock of potassium fertilizers in the country is still 6 million tons. In other words, even if China does not import any potassium fertilizers this year, its existing stocks will still be sufficient to meet market demand. “Both sides in the negotiations are waiting and making moves from time to time, hoping that the outcome of the struggle will ultimately be favorable to their side. ”Xu Wenfeng said. “A 25% price cut on potash exported to Brazil is not necessarily a sign of easing pressure on Belarusian potash prices. ”It is understood that Brazil’s approach to importing potash from Belarus differs from that of China and India; instead of signing long-term import contracts, it purchases through short-term contracts. “Although Brazil is also one of Belarus’s major customers, its purchasing methods and volume determine that its influence is less than that of China and India; this is why Belarus is willing to agree to lower prices. ”Xu Wenfeng analyzed. However, it is an undeniable fact that the current financial crisis has led to a pessimistic outlook for global agricultural products (15.27,-0.20,-1.29%), with weakened purchasing power among end-users who can no longer afford expensive fertilizers.