Shortfall of ammonium phosphate to be covered in near future 03-31-2020

In late Feb. 2020, manufacturers in many provinces said that they faced shortfalls in supplies of monoammonium phosphate and diammonium phosphate due to the impact of COVID-19. Nevertheless, CCM estimates that the shortfalls will be replenished within a month as production and logistics gradually recover.

At the news conference held by the Joint Prevention and Control Mechanism of the State Council of China on March 5, Zhang, Director of the seed industry management department of the Ministry of Agriculture and Rural Affairs, said that 92% of the 362 key seed agricultural enterprises have resumed work. Due to the fact the Hubei province is short nearly 2,000 tons of agricultural chemicals, 156 agricultural enterprises promise to provide chemical supplies for the province.

Zhang also said that the total annual supply of seeds, pesticides, chemical fertilizers and agricultural film was always more than the demand, and the provided agricultural supplies could be increased to twice the typical annual agricultural supplies. Currently, the main problem is a break in the production chain of agricultural supplies. Lately, the Ministry of Transport of China and the Ministry of Agriculture and Rural Affairs announced an emergency notice of a spring transportation service guarantee of agricultural production materials. It is said in the emergency notice that each province should provide an easy access when it comes to transporting agricultural supplies. Enterprises should print out an entry-exit pass for vehicles transporting agricultural supplies from the government website. Those vehicles with a pass should not be pulled over, checked, or charged fees. According to feedback from 25 provinces and 1500 counties in China, roads and paths in cities and villages are mostly clear, and vehicles transporting agricultural supply can easily travel along the roads.

Agricultural production enterprises resume work and begin producing supply

Recently, many agricultural enterprises have resumed work. 92% of the 362 key seed agricultural enterprises have started to work again, and the overall production level is at 62% of the level prior to the virus.  Other enterprises have also resumed work, including 69% of fertilizer urea enterprises, 62% of monoammonium phosphate enterprises, 61% of diammonium phosphate enterprises, 88% of potash fertilizer enterprises, and 51% of compound fertilizer enterprises. 70% of the 1,400 pesticide enterprises have also resumed work.

Hubei Province is now following the requirements of the farming season in China so that agricultural enterprises can organize arrangements for agricultural supply. Early rice seeds were prepared by March 10. Rice seedlings were raised by March 15, and the preparation for wheat’s agricultural chemicals was completed by March 20. Middle-season rice seeds should be prepared before April 10. 

Fertilizer prices low but expected to increase as agriculture resumes

According to research, the price of fertilizer will rise between RMB 50 from RMB 150 per ton. Affected by COVID-19, the demand of fertilizers has been stagnant.  With the better control of COVID-19 in China, the agricultural enterprises have resumed work, and the demand for fertilizers has increased. According to China’s Agricultural Means of Production Association, the current price of various fertilizers is lower compared to the same period last year. For example, the wholesale price of carbamide is now RMB 1,885 per ton, and the retail price is RMB 2,070 per ton, which is a decrease of 7% and 0.35% compared to the same period last year. A 5%-10% decrease can also be seen on the prices of Diammonium phosphate, potassium chloride and compound fertilizer.

For more information on China’s fertilizer market, please check our Phosphorus Industry China Monthly Report.

Subscribe to our Newsletter


Next Press