A Dominating Industry in China: Fertilizer and Chemical Fertilizer

China’s fertilizer industry plays an integral role in supplying the world with high-quality chemical fertilizers. Fertilizer is a vital component to any economy’s agricultural sector, and with the rising population, there is an imperative need for a constant and reliable food supply. Countries around the world look to China to not only grow a large portion of their food but also to help meet the demands of their own agricultural needs.

 

China is currently the world’s largest consumer and exporter of all three NPK macronutrient fertilizers (nitrogen, phosphorus, and potassium). They consume on average 52 million tonnes per year (2014) all while producing most of it right at home. Fertilizer manufacturers in China produce 74.32 million tones of NPK fertilizers (2015) and export roughly $3.3 billion worth of these mixed chemical fertilizers (2017).

 


Must Read: Top 10 Fertilizer Manufacturers in China


 

Global Fertilizer Market Overview

 

The Food and Agriculture Organization of the United Nations (FAO) publishes regular reports on the global fertilizer industry and in their most recent report, they state stating that the global nutrient capacity sat at 285.15 million tonnes in 2015. It rose around 3.5% in 2016, with the supply also growing 1.7%, to reach 295,587 million tonnes. The FAO also forecasts global fertilizer capacity and fertilizer production rates to increase through to 2020. An industry analysis report conducted by IndustryARC states that the global fertilizer market will reach $151.8 billion by 2020.

 

The FAO also estimates fertilizer nutrient demand to hit 186.67 million tonnes in 2016, with an average CAGR of 1.9% by 2020. Another report by Mordor Intelligence states that nitrogenous fertilizer makes up for 41.6% of all fertilizer nutrient demand, and is expecting a CAGR of 3.29% between 2017 and 2019. Some factors influencing fertilizer’s growing demand include positive global economic growth, the input-output prices of fertilizer nutrients, high population growth, food security concerns and the demand for 100% productivity of the current arable agricultural land.

 

Other major mixed chemical fertilizer exporters include Russia (16%), the U.S (14%), Morocco (11%) and Israel (5.4%)

 


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China Fertilizer Exports

 

China is the world’s largest exporter of fertilizers. In 2016, fertilizer manufacturers in China dominated the global export market, holding 20% of exports, valued at $3.3 billion. The main importers of Chinese fertilizer include India (31%), Vietnam (10%), Pakistan (7.3%), Brazil (7.2%) and Thailand (5.9%).  

 

New fertilizer tariff laws implemented in 2017 saw for export tariff rate cancellations. All nitrogen fertilizers, like urea and ammonium chloride, and fertilizers consisting of nitrogen and phosphorus compounds saw tariff rates drop from 5% to 0%. All NPK compound fertilizers experienced a 10% decrease, dropping from 30% to 20%.

 

The tariff rates for phosphorus fertilizers and materials like triple superphosphate and other calcium superphosphate will see their rates increase. No change will happen to the tariff rates on China’s potassium fertilizers.

 

With these changes to China’s fertilizers, the government is hoping to get rid of outdated plants and improve China’s competitiveness in the international fertilizer market by increasing export volumes. There are big changes happening within the global agricultural sector, and due to new environmental policies, economies are moving away from chemicals and experimenting with more organic alternatives.

 

Future of China’s Fertilizer Industry

 

A Research and Markets report states that the China fertilizer market price has been rebounding but still fluctuating at a low level. With the decreasing material prices and rebounds in production costs, China’s fertilizer production margins went up slightly. This is all in wake of China’s “zero growth policy,” which hopes to reach no growth in chemical fertilizers by 2020. That is an impressive goal.

 

China’s fertilizer plan is to completely switch from chemical nutrient fertilizers to organic nutrient fertilizers that are sourced from natural decomposing materials such as animal manure, compost, and crop residue. There have not been any large-scale successes of switching to completely organic fertilizers, but China wants to be the first. China’s government plans to pave the way to a more environmentally friendly and economically stable fertilizer market.

Connect with Fertilizer Manufacturers in China

 

China’s fertilizer industry attracts major buyers and sellers from top companies around the world. Fertilizer manufacturers in China have become highly respected suppliers by offering high-quality fertilizers and fertilizer materials. Now, with China’s new tariff laws, this may be a prime opportunity that your company could greatly benefit from. To help you get ahead, BizVibe wants to provide you with the best solutions to source fertilizer products from China.

 

BizVibe can help you achieve your goals along the beginning hurdles of your selling and/or buying cycles. If you’re conducting competitive research or looking to source from reliable suppliers, producers and wholesalers, BizVibe simplifies the process. BizVibe’s free intelligent platform makes it easy to grow your business by keeping track of your contacts as well as introducing you to key industry players and decision-makers around the globe.

 


 

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