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
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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