- Industry News
- Company News
- Fertilizer Information
- Consulting Service
- 《CFMW》 Report
3 factors hinder China’s chemical fertilizer exportRelease_time：2018-05-30 15:08:00 Source：original
China's fertilizer export volumes have declined for two consecutive years (2016 and 2017). And, in the first four months of this year, fertilizer exports were down 19% y/y. Three factors hinder export.
First, the effects of favorable policies have waned. China’s nitrogen and phosphate fertilizer manufacturers enjoyed the most favorable export tariffs in 2017, as zero tariffs were implemented in that year, but their export volumes still dropped in the year. In 2018, the export tariff for NPK compound fertilizer was greatly reduced from 20% (price-based) to 100 yuan/ton; however, NPK fertilizer export turned out to be quite low (just over 40,000 tons was exported in 2017). Even if NPK export rises to 1 million tons in 2018, its impact on China’s overall fertilizer export will remain limited.
Second, the competitiveness of China's fertilizers in the global market has declined. In the past, chemical fertilizer manufacturers enjoyed preferential policies in terms of electricity price, natural gas price, VAT, railway freight price, etc., so their fertilizers were generally competitive in the global market. However, most of those preferential policies have been dropped in recent years. In addition, as new low-cost fertilizer plants are put into operation in the international market, the competitiveness of China's fertilizers is decreasing, especially urea. China's urea prices are much higher than the international market prices, making export harder.
Third, the Chinese yuan's appreciation against the US dollar is adverse to fertilizer exports. The yuan has gained 10% against the dollar since the start of 2017. Fertilizer companies in China are less motivated to export their products as the export prices effectively drop due to the stronger yuan.