China struggles to keep fertiliser

Updated: 13/09/2008


, Forbes Business News, 28 April 2008

Klamann, Reuters, 30 August 2008
Zhiming, China Daily, 2 September 2008

China, the world’s biggest grain producer, have raised their export tariff
on fertilizer in a desperate move to maintain domestic food production.

Fertiliser despatchThe move aims to shield China’s farmers
from worldwide fertilizer price rises and shortages during the peak growing season..

Other measures include capping domestic fertilizer prices
at around USD 250/tonne to encourage farmers to plant much needed food crops.

With the global FOB price above USD 500/tonne, China’s fertilizer
producers have profited from the gap between the export and
domestic price with increasing exports 71 percent in the first
6 months of 2008.

World demand for oil replacements such as corn alcohol and biodiesel,
is blamed for the soaring prices of food and fertilizer.

Fertilizer prices have jumped because additional
fertiliser is needed for huge plantings of biofuel crops and
fertilizer production capacity is overstretched.

China’s export duties on urea and ammonia will increase to 150
Export tariffs for other fertilizers will remain at 100 percent, till
the end of December.

China’s fertilizer export tax could increase further
in coming months.

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