After extensive communication and negotiation with representatives from 30 major nitrogen fertilizer production and distribution companies nationwide, the China National Nitrogen Fertilizer Industry Association formally submitted a proposal to the National Development and Reform Commission. The association outlined five key recommendations, including raising the urea ex-factory price and maintaining the existing fertilizer support policies.
According to recent reports, the chemical fertilizer market in China has experienced significant changes in supply and demand dynamics. Rising production costs have placed increasing pressure on fertilizer companies, while the challenge of selling at higher prices has become more pronounced. Additionally, new issues have emerged regarding fertilizer market regulation and off-season reserves. In response, the country is considering adjustments to its 2008 fertilizer policy to make it more effective and practical.
To ensure the policy reflects the real conditions of the industry, the National Development and Reform Commission commissioned the China Nitrogen Fertilizer Industry Association to organize a meeting on December 21–22, 2007. This event brought together representatives from 30 large-scale fertilizer companies to discuss current challenges and provide input on policy improvements.
Following detailed discussions on the implementation of preferential fertilizer policies, the availability of raw material transportation, the pros and cons of the off-season reserve system, the growing gap between rising production costs and fixed ex-factory prices, and concerns about factors affecting the industry's sustainable development, the association prepared a set of recommendations for the National Development and Reform Commission.
The recommendations include: first, maintaining existing supportive policies for fertilizers; second, ensuring regional supply of essential production inputs such as natural gas, coal, electricity, and coal-fertilizer materials in 2008; third, increasing the urea ex-factory price from the current 1,500 yuan per ton to 1,600 yuan per ton, while keeping the tax rate at 15%; fourth, improving the off-season reserve system and increasing the responsibility of fertilizer manufacturers to build up reserves; and fifth, when monitoring compliance with price limits, the assessment should be based on the annual average ex-factory price rather than the highest price during a specific period.
These proposals aim to create a more balanced and sustainable environment for the fertilizer industry, supporting both producers and consumers while ensuring stable market operations.
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