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In order to clarify the circumstances, in early January, the Development and Reform Commission, the Ministry of Agriculture, the China Supply and Marketing Corporation and other relevant departments and industry associations participated in the Spring Ploughing Fertilizer Symposium held in Zhengzhou by the Ministry of Industry and Information Industry.
According to the representatives of participating companies, the current fertilizer industry faces the following problems: First, after the adjustment of tariffs, the enthusiasm of fertilizer production enterprises has been frustrated, and the peak utilization rate of urea in winter fertilizers is only 73.3%; second, dealers wait and see seriously, although at the end of the year Start, but fertilizer prices are low, fertilizer companies are operating at a meagre profit or loss. Third, there are rare raw material prices and product sales prices are upside down. Fourth, raw materials and chemical fertilizer products are being transported, dealers delay storage, and the pressure on companies' inventory increases.
The data from the above meeting showed that in November 2010, the urea ex-factory price was almost close to the cost, and the average operating rate was only 73.3%.
According to a survey report, after the New Year's Day, coal companies in Shanxi and other places increased their coal prices, raising the cost of urea production. With the rising prices of raw materials, it is expected that the price of urea will rise slightly in the later period.
Although the fertilizer season is before the Spring Festival, the distributors are afraid to purchase because of the high fertilizer prices. Many wholesale dealers complained whether inventory has become a “gamblingâ€.
Most wholesalers maintain their inventory at 50% last year, and some even only 10%. The grass-roots fertilizer retailers with relatively weak financial strength are currently at zero inventory or a small amount of inventory, and the inventory types are mainly compound fertilizer and diammonium phosphate.
The relevant person in charge of the supply and marketing cooperatives in Dandong City, Liaoning Province stated that the total production of chemical fertilizers in Dandong in the year totaled 190,000 tons in 2011. However, the current regional inventory plus recent purchases do not exceed one-fifth of the annual demand.
They suggested that the government implement a temporary loan system for discounted fertilizer reserves to reduce the financial pressure on dealers to reserve chemical fertilizers to ensure that the post-holiday spring production and fertilizer prices are stable.
Urea operating rate is only 70%, Ministry of Industry and Information Industry discusses spring plowing measures
Once Xiaohan has passed every year, agricultural production will enter the stage of spring tillage and storage. However, Henan, Northeast China, and other places where there are large grain-producing provinces, have not seen the preparation of fertilizers in previous years.