June 14, 2012
China's urea prices may drop on government directive
China's urea prices are seen to gradually fall back to average levels after July as the National Development and Reform Commission (NDRC), the nation's price regulator, is strengthening imports and exports regulation, an NDRC official said.
The domestic urea prices saw persistent rise from April to early May. By May 10, the mainstream ex-factory prices of urea in China reached RMB2,400-2,500/tonne (US$379-$395), a jump of more than 22% from the beginning of this year.
The official ascribed the robust price rise to booming fertiliser demand from spring planting, mounting production and operating cost of fertiliser plants, and urea price increase on the international market.
However, he predicted that the tight supply of urea would be eased after July along with increasing commercial stocks.
According to the official, the government will levy a 7% tariff on urea exports and set the benchmark export price at RMB2,100/tonne (US$332) during the slow season from July 1 to October 31. Once the export prices are higher than the benchmark price, the exports will be levied progressive tariffs.
Meanwhile, the government would continue to increase fertiliser reserves to further raise its ability in market regulation, the official added.