Fertilizer Off-season, Why Does Compound Fertilizer Companies Contrary to Price Rise?

Recently, there has been a strange phenomenon in the fertilizer market: As soon as the fertilizer season is over, the sales of domestic compound fertilizers have reached a new high. Some companies' compound fertilizer prices rose by about RMB 100/t compared with the sales season, and were higher at RMB 200/t or more. In the near future, many companies still have plans to adjust their prices upwards. Why does a compound fertilizer company move against the trend?
The first domestic fertilizer company listed in Singapore – Henan Xinlianxin Fertilizer Co., Ltd. Zhu Cuiping, the deputy general manager of the compound fertilizer company, tells the truth: The price increase of the company is really helpless. The current urea market is not the same as in previous years, and the increase in phosphate fertilizer and potash fertilizer prices is obvious to all. If the ex-factory price of compound fertilizer does not increase, companies will have to bear the pressure of rising costs themselves. For this reason, Xinlianxin Company raised the compound fertilizer price by an average of RMB 80/t in two months.
A general manager of a medium-sized compound fertilizer company in Jiangsu said that in Russia, red-potassium is quoted at prices as high as 2,100 yuan/ton in many ports, and white potassium is as high as 2,200 yuan/ton. In half a year's time, there was an increase of nearly RMB 300/ton, and the actual transaction price also increased by more than RMB 200 per ton. He used "to cry no tears" to describe his confusion and frustration with raw material prices.
On June 1 this year, the state began to levy tax on the export of diammonium phosphate. From the situation in the past two months, the price of diammonium phosphate has shown an overall upward trend.
Wang Xiyi, vice president of Anhui Six Kingdoms Chemicals, believes that the export taxation of DAP has prompted some companies to seek monoammonium phosphate instead. Since monoammonium phosphate has been used as a substitute, its price has also increased. In addition, the export of monoammonium phosphate is not taxed, and the increase in its export volume has also driven up the price.
In recent months, the supply of domestic sulfur market has shown a tense trend, resulting in a sharp rise in prices. At present, the price of sulfur received by several large-scale compound fertilizer plants has increased by several hundred yuan per ton from the previous period. Yang Huafeng, deputy general manager of Hubei Yangfeng Co., Ltd., said that they have issued the sulfur of L/C. The goods are still subject to substantial price increases and multiple price increases by individual suppliers. The sulphur prices to the plant in August and September should exceed 1,800 yuan/ Ton. This is because of taking care of many years of relationship and friendship. Jiang, a large-scale compound fertilizer company in Shandong, joked that the price of sulphur they went to the factory had already exceeded 1900 yuan/ton. If this goes on, he will lose even the family. Due to the pressure of cost, he had adjusted the price of compound fertilizers of various specifications in an unwilling manner, with an average increase of RMB 150/ton. The CEO of another big factory in Hubei said that the cost per ton of sulfur-based compound fertilizer is 250 yuan/ton higher than that before the price increase of sulfur. If he does not increase the price, the factory will have to close.
A manufacturer's sales manager reluctantly said that if prices do not increase, they will lose money, and if prices increase, they will lose money and drag on a production line so that they can wait and see the changes in the market.
As for the price of compound fertilizers, how does the downstream distributors react?
The dealers were obviously frightened, and the hundreds of tons of thousands of tons of transactions in the past have been rare. Tong Fuhua, chief executive officer of Jiangsu Hai'an Agricultural Materials Fort Lee Branch, said that because the price of fertilizers has risen, people have to spread it one or two bags for a single mu of farmland. Now they have to use half a bag instead of one bag. Because if you follow the previous application, the cost of farming is too high. Several grass-roots distributors are also uneasy about the price adjustment of compound fertilizers. Prepayments order it, the repayment period to reach half a year long, it is too long, limited liquidity also expect to do something else; do not pay for orders, wait for the price to rise again, go up to sell the goods, Estimated sales pressure is greater.
The industry believes that if the increase in compound fertilizer prices exceeds the affordability of grassroots dealers and farmers, the supply and demand relationship in the compound fertilizer market will change and lose balance.

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