Exaggerations about winter stockpiling in 2015-16 – Useless anyway

Thread Content

Exaggerations about winter storage in 2015-16 – Useless talk. Author/Source: China Fertilizer Network. Date: 2016-02-02. Clicks: 9. Without favorable timing, location, and teamwork, even a victory can bring disaster. 　　　　　　　　　　　　　　　　　　　　　　--“The Art of War by Sun Bin: Battle of the Months” As the Spring Festival approaches, the breath of spring has quietly arrived. The cold winter of 2015 did not stop the arrival of spring in 2016, but it halted the process of storing fertilizers for winter use. Fertilizers are a typical type of product that is produced throughout the year but sold on a seasonal basis. During the off-season in winter when there is less demand for fertilizers, agents, distributors, and other market participants stock up on them to sell again during the peak season in spring. This practice is known as winter storage, and it is aptly compared to a \"reservoir\". However, looking at the trends in winter storage of chemical fertilizers over the years, it is clear that in the past two years such storage has become increasingly useless – it’s a shame to discard it yet it offers no real value when used, and the \"reservoir\" of such stored fertilizers is gradually running dry. 　　Major distributors indicate that the decision to start winter stockpiling depends not on timing, but on price changes. Before the reinstatement of value-added tax on fertilizers on September 1, 2015, some distributors purchased large quantities of fertilizers in order to avoid losses. However, the market situation is not as desired; the prices of various fertilizers continue to fall. As of now, urea alone has resulted in a loss of around 200 yuan per ton. This year’s winter storage of chemical fertilizers can be aptly described as poor weather, unfavorable conditions, and lack of cooperation among people. Now, let the editor analyze them one by one for the readers. 　　Unsunny weather: In the second half of 2015, many areas in the south experienced rainy conditions; especially after the arrival of cold waves, these rains turned into heavy snowfalls, and temperatures were lower than in previous years at the same time of year. Excessive precipitation has led to high soil moisture levels, making the soil too wet and affecting the cultivation of crops in certain areas during that growing season. Severe stormy snow conditions further caused damage to agricultural facilities such as greenhouses. A series of adverse weather conditions have affected agricultural cultivation, thereby impacting normal fertilizer demand. 　　Unfavorable conditions: As urbanization in our country accelerates, the area of arable land is gradually decreasing while the area dedicated to residential use is increasing. Young and middle-aged people in rural areas tend to go out to work, leaving mostly the elderly to farm. Both of these trends make it difficult for agriculture in our country to develop in a positive and healthy manner, and the fertilizer industry, which is closely related to agriculture, is also severely affected by this situation. On the other hand, the purchase prices for agricultural products this year are too low; in some areas, the price for corn is 0.8–0.9 yuan per jin, while the price for cotton is 1.5 yuan per jin. After working hard throughout the year, farmers do not earn the income they had hoped for, and as a result they are reluctant to sell their crops. As a result, farmers have less money to purchase the agricultural inputs needed for the next growing season, and their enthusiasm for farming has also been significantly dampened. 　　Differences among players: Fertilizer manufacturers are now present throughout the country, with some of them adopting a direct sales strategy to gain a foothold in the market. If farmers need fertilizer, they can call the manufacturer directly, and dedicated staff will deliver it to their door. Some manufacturers also carry out direct promotions to large-scale growers, offering a discount of 10,000 yuan in exchange for a LCD TV… All these measures have significantly reduced the living space available for distributors, who, as the main force behind winter storage, are indeed left with little capacity to cope. 　　As of now, various fertilizer and seed stocks remain in a weak state, with no clear positive factors. With the Spring Festival approaching, some compound fertilizer factories have prepared to shut down for maintenance, and distributors are also starting to take holidays one after another. Before the Spring Festival, there should be no significant changes in winter stockpiling. Once demand picks up again in spring, it is hoped that fertilizer prices will rise, so that this increase can bring some profit to distributors. http://www.nmtech.com.cn/*nwen_hyyw_xx.asp?path=45&id=175226