China’s Compound Fertilizer Export Increases and import Decreases

With the devaluation of RMB, zero tariff on exports and the initiative of “One Belt and One Road”, the export quantity of compound fertilizer in China has increased rapidly this year, especially the export of ternary compound fertilizer. It is noteworthy that with the development of domestic process technology and the improvement of product quality, the import quantity of ternary compound fertilizer in China has declined.

Customs statistics show that the export volume of ternary compound fertilizer in China reached 5447,000 tons in January-July 2019, an increase of 214% over the same period last year, and the monthly average price in January-July was 318 US dollars/ton, a decrease of 27.89% over the same period last year. Judging from the specific months, the number of July only declined compared with the same period last year, while the number of other months increased compared with the same period last year, with an increase of 623% in February. From the point of view of export areas, China’s ternary compound fertilizer mainly exports to 92 countries and regions such as Myanmar and the Philippines, of which the largest number is exported to Myanmar, followed by the Philippines, which accounts for about 80% of the total export volume.

In addition to the increase in ternary compound fertilizer exports, the export of binary compound fertilizer has also increased slightly this year. According to customs statistics, from January to July 2019, the export volume of binary compound fertilizer reached 752,900 tons, an increase of 35.98% over the same period last year. From the point of view of export areas, China’s binary compound fertilizer mainly exports to 34 countries and regions such as the Philippines and Brazil, among which the top 10 countries account for 92.25% of the total export volume.

Xu Shuxian, a fertilizer analyst at Jinlianchuang, believes that this year’s substantial increase in the export of compound fertilizers is mainly supported by zero tariffs. In mid-December 2018, in order to meet the needs of the reform of the export management system and promote the structural adjustment, quality improvement and efficiency of the energy and resources industry, it was decided that 94 commodities such as fertilizer and apatite would no longer be subject to export tariffs as of January 1, 2019. That is to say, from January 1, 2019, China has implemented zero tariff policy for the export of compound fertilizers, both binary and ternary.

“Although China’s compound fertilizer production capacity is excessive, there are still some parts that need to be imported, especially high-end ternary compound fertilizer, with an annual import volume of about 1 million tons. However, in recent years, with the development of new fertilizers and the improvement of production technology, imports have a downward trend. “Xu Shuxian said. According to customs statistics, the total import volume of ternary compound fertilizer in China was 875,000 tons from January to July 2019, down 1.69% from the same period last year, and the average monthly export price was 487 US dollars/ton, down 6.80% from last year’s average monthly price. In January, April and June alone, compared with the same period last year, there was an increase, while in other months, there was a decrease of 50% in July.

From the point of view of source countries, the import of ternary compound fertilizer in China mainly comes from 30 countries and regions, such as Norway, Russian Federation, Belgium and Finland. Norway, Russian Federation, Belgium and Finland are still the main sources of ternary compound fertilizer import in China. According to statistical data, from January to July 2019, China imported 308,200 tons of ternary compound fertilizer from Norway, accounting for 35.22% of the total import; from January to July, 207,000 tons of ternary compound fertilizer from the Russian Federation, accounting for 23.68% of the total import; and from Belgium and Finland, the import volume was 171,300 tons and 107,200 tons, accounting for the proportion. 19.57% and 12.24% respectively.

Xu Shuxian believes that, on the whole, export growth and import decline are the trend of compound hypertrophy, which is not only conducive to alleviating domestic excess capacity and supporting domestic supply, but also conducive to improving the international status and voice of Chinese compound fertilizer and achieving the goal of “going out”.