China’s fertilizer market witnessed violent fluctuations in 2008. Fertilizer production merely added
2.9% over the previous year, but consumption dropped 1%. Fertilizer imports and exports
experienced a slip of 48% and 33% respectively from the previous year. Except moderate growth
of urea and ABC prices, other fertilizer price went up more than 50% on average over the previous
year. Subject to raw material market changes and export tax policy changes, fertilizer price ran
high in the first half of 2008 but went downhill in the second.
Fertilizer stock was about 14.1 million MT (nutrient) at the end of 2008, a growth of 6% on the
year-on-year basis. Year-end stock/consumption ratio was 24.7%, up 1.6% on the year-on-year
basis.
Against the backdrop of the government’s favorable economic policy, fertilizer market is
anticipated to recover gradually in 2009, but market surplus may linger on. Fertilizer consumption
and exports will be promoted by the government’s more support to farm production, rising
grain/fertilizer price ratio and reduction of fertilizer export tax. Fertilizer production is predicted to
grow by a small margin because of better supply of raw materials and energy and the
government’s favorable policies to the fertilizer industry.
Fertilizer inventory is estimated to be 15.5 million MT at the end of 2009 and stock/consumption
ratio may reach 26.9%. Considering surplus supply in the market and decline of fertilizer
production cost, fertilizer price is predicted to drop in 2009 from last year.
Table1, China Chemical Fertilizer Balance Sheet, 2004-2009
