The three major drawbacks of China’s fertilizer market tell us: this is winter!

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This post was last edited by yinkuilin6868 on 2015-11-23 at 20:14. 1. The problems resulting from blind expansion of production capacity have persisted for a long time, and the issue of overcapacity cannot be resolved in the short term. Overcapacity has clearly become the main factor hindering the development of the industry, but we cannot ignore the underlying problem: how does severe overcapacity arise? How to solve it? It can be said that excess is an inevitable stage in the development of any industry, but we are already well past the limit! The blind pursuit of profits and performance is an issue of mindset, as well as an important factor that contributes to excess. As awareness of ** and the industry grows, there is a widespread call to control excess and conserve resources. Yet once actual control is attempted, it becomes clear that such changes cannot be achieved overnight! 　　Balancing capacity is a long-term task. We can all see that trying to appease policies and the market only leads to further delays and greater harm; taking decisive action to resolve problems quickly may, however, bring up issues related to people’s livelihoods. No matter what is done, there is one outcome: if the dynasty prospers, the people suffer; if it perishes, the people still suffer! Whether it’s a long-term pain or a short-term one, pain is something that makes it difficult for everyone to make a choice, **and causes them to hesitate as well. 2. High dependence on exports 　　The problem of overproduction is severe; when domestic demand is insufficient to absorb it, reliance on exports becomes inevitable. Of course, it must also be admitted that the significant increase in China’s fertilizer exports in recent years has enabled the country to gain a large share of the international market, with its export channels expanding. But we must reflect on the fact that we are also under great pressure from the international market. 　　We rely too much on exports; by blindly expanding them, competition in terms of product quality and price becomes inevitable. It is precisely for this reason that more and more international businesses are able to identify our weaknesses and use them to undermine the standing and growth momentum of our industries. These days. The export prices of nitrogen and phosphorus fertilizers are much lower than their domestic sales prices, which gives the impression that the domestic fertilizer industry is acting in its own interest at the expense of the public. 3. The import supply chain is difficult to break, posing a threat to the domestic market. There is currently no absolute surplus of potash fertilizers in our country, but as production increases year by year, import volumes keep rising, making the issue of relative surplus increasingly prominent ； China has a severe surplus of compound fertilizers, but a considerable amount is still imported each year ； Even phosphate fertilizers are imported in considerable quantities. Apart from quality issues, international interest cooperation also makes it impossible for us to turn away. There is especially one more important issue: food imports are increasing year by year. 　　The author believes that an increase in imported grain affects our two aspects of security, one of which is health safety. I have always believed that you get what you pay for. Economic difficulties are a global issue, and China is no exception. The cost of food in China isn’t significantly higher than the international production costs; in fact, imported food is even cheaper than domestically produced food. Is this really a situation that ensures food security? The second is the issue of production safety. Even if we are not aware of health and safety issues, with cheap imported grains available, who would want to eat expensive domestic grains? If no one buys domestic grains, then who will be willing to grow them in the country? Our agricultural survival crisis, the crisis of food self-sufficiency, and issues related to the security of international vital interests all arise as a result. This threat is not far off; an example can be seen in the current fertilizer industry. 　　Many large fertilizer manufacturers have said that it is difficult to increase production at the moment, as it is hard to gauge the domestic demand for fertilizers. The sharp drop in grain prices has had a significant impact on ordinary people, and no one wants to take the risk of producing and stockpiling fertilizers. Even though current raw material inventories at various factories are low, the theoretical demand that exists cannot stimulate the market to start functioning. 　　Summary: From these three aspects, two outcomes are inevitable in this industry: first, backward industries and enterprises along the industrial chain will shut down. II. The reduction in costs from fertilizer raw materials to finished product production brings benefits to farmers. Reality tells us: this is winter! The snowstorm has arrived; one only needs to face it. What we can also hope for is whether policies will be able to boost farmers’ enthusiasm for farming, bringing a spark of vitality to the industry during the winter!