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Chemical Fertilizer Laws Bring Challenges and Opportunities for Chinese Producers

BEIJING, July 24 Xinhua-PRNewswire — Due to rising prices for agriculture products, agrochemicals and pesticides ( http://news.tootoo.com/Chemicals/ ), along with the decrease in foreign imports, the Chinese domestic price of chemicals has recently skyrocketed. As a result, in an effort to maintain Chinese farmers' income at reasonable levels, the National Development and Reform Commission (NDRC) has altered their fertilizer regulation policy. Yesterday, a senior agriculture channel investigator of Tootoo.com's news website interviewed several agriculture enterprises about the impact of this new policy.

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One of the interviewees from a chemical enterprise and registered member of Tootoo.com from Tianjin said that in the actual execution the agrochemicals' factory price ( http://www.tootoo.com/w-Agriculture/ ) was well regulated and followed appropriate policies. However, in the preferential policy aspect, only value-added tax exemption was carried out, while other policies were often overlooked because of the elasticity of the policy. So the difficulty of the enterprises maintains the production operation enlarges widely.

Another chemical fertilizer ( http://news.tootoo.com/Agriculture/ ) interviewee from Shanxi also indicated that the fertilizer enterprises' situation is very difficult, because the coal market is now completely deregulated and can raise prices at will. Coal, as the most important energy source for producing chemical fertilizers, impacts this market closely. Moreover, urea is being restrained by price limits.

Therefore, in a professional report, senior agriculture channel researchers said that the rigidity of the chemical fertilizer price policy, part of the preferential policies not being carried out and raw material prices continuing to rise put huge pressure on Chinese domestic chemical fertilizer producers to meet challenges and opportunities. In the report, it also points out that although the government puts chemical fertilizer production in a very vital position, highlighted by the release of a series of preferential policies for raw material supplies and tax revenue, the effect was not always obvious.

Recently, a market analyst from Tootoo.com learned that the National Development and Reform Commission (NDRC) has proposed preliminary improvement programs such as cancelling potassium fertilizer ( http://www.tootoo.com/buy-potassium_fertilizer/ ) price supervision and subsidizing farmers. This basically means the price of potassium fertilizer will be unlocked by the government.

In addition, Tootoo.com's market analyst analyzed that speaking of the present market situation, the opportunity for the domestic chemical fertilizer market is bigger than the risk, judging from China's domestic chemical fertilizer falling prices, compared with international raw materials and chemical fertilizer prices, which are still rising. Meanwhile, if international chemical fertilizer prices continue to grow, China will re-export chemical fertilizers, putting pressure on domestic market supplies. However, overall agricultural chemicals are set for a boom under the current environment of rising raw material costs and increasing demand.

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SOURCE Tootoo.com

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