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According to the notification, with the approval of the State Council, from December 1st to December 31st 2010, the proportion of urea, diammonium hydrogen phosphate, ammonium dihydrogen phosphate, ammonium dihydrogen phosphate and diammonium phosphate was 35%. Temporary tax rates impose export tariffs and impose a special export tariff of 75%. December is the off-season of fertilizer exports. According to the new policy this year, it must implement the peak season tariffs.
According to reports, this year the state's policy on restricting fertilizer exports has not only shortened the low-tariff period of nitrogen fertilizer and phosphate fertilizer in the off-season, but also adjusted the nitrogen fertilizer from 6 months to 4 months, and adjusted the phosphate fertilizer from 6 months and 4 months to 4 months. It also reduced the off-season. The benchmark price for fertilizer exports was adjusted from 4,000 yuan to 3,400 yuan for diammonium phosphate, from 3,700 yuan to 2,900 yuan for monoammonium phosphate, from 2,300 yuan to 2,100 yuan for urea, and 7% off-season tariffs were applied for fertilizers below the benchmark price. Ad valorem tax is applied above the benchmark price.
It is understood that the State Department's move aims to curb the recent export of chemical fertilizers, stabilize the market price of domestic chemical fertilizers, curb the current rapid increase in the prices of agricultural products, and help protect domestic winter chemical fertilizer reserves in preparation for the need for spring plowing and fertilizer use in the coming year. Since July, the prices of daily necessities, mainly agricultural products, have risen rapidly, while chemical fertilizers have accounted for the largest proportion of agricultural inputs, and the suppression of fertilizer prices has been the first to come. However, according to Wu Xiyan, the increase in fertilizer prices since October was mainly due to the sharp increase in production costs, energy-saving emission reductions leading to production declines, and price incentives leading to export pulls. This is caused by three factors, the most fundamental being rising production costs. Fertilizer is a low-profit industry. In the first eight months of this year, the profit rate of the phosphate fertilizer industry was only 4.9%, and the nitrogen fertilizer industry accounted for only 1%. "Suppression of exports this time can only lead to the detention of fertilizer products in China, and the fertilizer companies will launch vicious competition," said Wu Xiyan.
Liu Shulan told reporters that the nitrogen fertilizer industry has been in a state of loss. This year the price has just picked up but is facing a sharp increase in coal prices. The adjustment of export tariffs makes the market less confident. “The production and operation of chemical fertilizer companies will be more difficult next year, and the economic benefits will be even worse. It is expected that nitrogen fertilizer will lead to losses in the entire industry, and phosphate fertilizers will subsequently fall into losses.†Wu Xiyan suggested that after the end of spring plowing next year, the country will adjust its current policy appropriately.
On November 30, the Customs Tariff Commission of the State Council issued a notification on the adjustment of export tariffs for chemical fertilizers in 2010. In November, it will apply 110% of peak season tariffs on nitrogen fertilizers and phosphate fertilizers. On December 1, Wu Xiyan, chairman of the China Phosphate Fertilizer Industry Association, said that the introduction of this policy has done great harm to the fertilizer industry. Liu Shulan, vice chairman and secretary-general of the China Nitrogen Fertilizer Industry Association, also believes that the policy has greatly damaged the enthusiasm of the production companies and is likely to cause the industry to shrink.