Frbiz Predicts Fertilizer Exports Will Increase

BEIJING, Feb. 26 /PRNewswire-Asia/ -- Frbiz.com, one of China's leading B2B search platforms, predicts that fertilizer exports will increase.

Despite China's fertilizer exports in 2009 being hit by the international financial crisis, leading to falling prices of agricultural products, as well as decreased demand in the international market for fertilizer and many other negative factors, China's fertilizer market has continued to grow. In 2009 China exported 8.84 million tons of fertilizer, only down 5% compared to 2008. Overall, prospects for China's fertilizer exports are good in 2010, and export volume is expected to increase by a certain amount, mainly due to the following reasons:

First, export policies are becoming less restrictive. The 2010 chemical fertilizer tariff adjustments from 10% down to 7% apply to super phosphate and other kinds of fertilizer, while urea, monoammonium phosphate, diammonium phosphate's ( http://frbiz.com/catalog-05000000-1/Chemicals.html ) off-season export tariffs are down from 10% to 7% as well; urea's off-season has been extended by two weeks from four and a half months to 5 months, marking the further liberalization of export policies concerning China's fertilizer exports.

Second, with international oil prices high, fertilizer production costs are rising. In early 2009, international oil prices of more than 30 U.S. dollars per barrel rose to 70 U.S. dollars by the end of the year. In 2010, international oil prices are expected to fluctuate between 70 and 80 U.S. dollars. Raw material prices rising will lead to fertilizer production costs increasing, thus increasing international fertilizer prices, which is beneficial to China's fertilizer exports.

Third, the Chinese fertilizer market's oversupply will force enterprises to increase export efforts. With new capacity increasing, China's fertilizer market supply and demand imbalance will become increasingly prominent, and in 2010 China's urea production capacity is expected to exceed 67 million tons, while China's domestic demand is less than 50 million tons. Though still needing to import potash fertilizer, China produces an excess of nitrogen, phosphorus and compound fertilizers, and so must increase the export efforts in order to alleviate the imbalance of supply and demand in the domestic fertilizer market.

However, a substantial increase in fertilizer exports is unlikely, because the positioning of China's fertilizer industry is very clear. In order to ensure China's domestic supply, protect farmers and national food security, only when domestic supply has excess circumstances will it be appropriate to export, since the fertilizer industry is not an export-oriented. If export is excessive it will affect domestic fertilizer market supply, and the state will raise export tariffs to take drastic measures to limit fertilizer exports.

Looking at imports, China's advantages in the international fertilizer market are becoming increasingly evident, and the country's need for international imports is decreasing. Since China already has an oversupply of the majority of kinds of fertilizer, it is expected that the country will import less and less from abroad, only importing potash and a few other varieties due to decreased demand.

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