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China’s change of fertiliser export tariff rates includes cancellations, increases as well as decreases. The overall export trend is likely to go up in 2017 as a result of the changes, according to CCM.
Source: Pixabay
The new Notice on Tariff Adjustment Scheme in 2017, that was revealed on December 23, 2016, contains several different changes for China’s fertiliser export. CCM has analysed the adjustments in a comparison to 2016:
The main fertilisers, whose export tariff rates are completely canceled in 2017 are nitrogen fertiliser, including urea and ammonium chloride, as well as the ones of nitrogen and phosphorus compound fertilisers.
The export tariff rates of phosphorus fertiliser are going to be increased. Other materials are triple superphosphate and other calcium superphosphate.
A decrease in export tariff rates will be found for NPK compound fertilisers. The value was 30% in 2016 and will be reduced to 20% in 2017.
Finally, no change is going to happen to the export tariff rates of potassium fertilisers. This is also including potassium chloride and potassium sulphate.
China’s fertiliser export tariff rates in 2016 and 2017
|
Product name |
Export tariff rate in 2016 |
Export tariff rate in 2017 |
|
Ammonium chloride for fertilisers |
5% |
0% |
|
Urea |
USD11.60/t |
USD0/t |
|
Other nitrogen fertiliser |
5% |
0% |
|
Triple superphosphate |
5% |
0% |
|
Calcium superphosphate |
5% |
0% |
|
Diammonium phosphate |
USD14.50/t |
USD0/t |
|
Monoammonium phosphate |
USD14.50/t |
USD0/t |
|
Nitrate and phosphate mixtures |
5% |
0% |
|
Nitrogen and phosphorus compound fertiliser |
5% |
0% |
|
NPK compound fertiliser |
30% |
20% |
|
Phosphorus and potassium compound fertiliser |
5% |
5% |
|
Other fertiliser |
5% |
0% |
Source: CCM & The Customs Tariff Commission of the State Council
The changes are a result of China’s effort to get rid of outmoded capacity that can be found in the fertiliser industry. In general, the fertiliser industry in China is facing a difficult time. Recently China has abolished most of the favorable policies for this industry, they are facing partly sharp increasing costs resulting out of environmental protection efforts and the overall sinking demand of fertilisers due to decreasing international crop prices.
The total export of fertilisers from China has been 25.03 million tonnes from January to November 2016, according to China Customs, which represents a down of 20.5% in comparison to the same period in 2015. The value of the export was USD5.90 billion, a down of even 39.3% year on year.
The cancellation and decrease of the export tariff rate of many fertiliser are therefore getting necessary because the Chinese fertiliser industry needs to get rid of the outmoded capacity of fertilisers. A reduced tariff rate will lead to a bigger competitiveness of Chinese manufacturers in the international market and will increase the export volume of fertilisers very likely.
CCM has the opinion, that Chinese manufacturers should also reduce their production of fertilisers to cause a lower supply that supports increasing prices in the middle-term. A stable volume would not support any increasing profit of those companies and even worse, lead to a higher pollution that as a return even increases the costs once more, lead to a resource waste and backfire to lower profits.
CCM also adds, that the strong dollar is currently keeping international fertiliser prices low, leading to more losses of Chinese manufacturers, if they are keeping their production level on a high grade.
About CCM:
CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.
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