"Fertilizer prices have risen every year. You can't afford it." This is a sigh issued by a Hunan farmer who is working in the fields. "Economic Information Daily" reporter recently found that the annual increase in the price of chemical fertilizers, especially potash fertilizers, has become a major constraint to China's agricultural development.

As China's largest importer of fertilizers, Feng Mingwei, deputy general manager of Sinochem Fertilizer Co., Ltd., interviewed by reporters called for: In order to break the worries of China's potash shortage and the price rise of imported potassium fertilizers, China is further strengthening the "potash fertilizer import joint negotiation mechanism." At the same time, it is also necessary to establish a strategic reserve system for off-season potassium fertilizers.

The monopoly of international suppliers intensified and the price of potash rose year after year. On June 30th, the international negotiations on potash fertilizer prices concluded by China's importers of fertilizers and international suppliers came to an end. The negotiations finally finalized the new CIF for imported potash in China in the second half of this year to be US$470/ Ton. Compared with the first half of the year, this price rose 70 US dollars per ton, and the price increase rate reached 17.5%.

According to Feng Mingwei who participated in the negotiations, the new price of potash fertilizer in China was obtained after the joint negotiation group composed of Sinochem, Zhongnong, and China Shipping Chemical and several major international suppliers through the “difficult price game”, compared with the international market. China's import of potash fertilizer has not changed.

Li Qiang, chief of the general office of Sinochem Group, and the spokesperson of the press, believe that the analysis of the reasons for the continuous and significant increase in international potash fertilizer prices cannot rule out factors such as the substantial increase in international basic resources and raw materials. “But the most important and fundamental reason is that international suppliers are Monopoly is intensifying."

First of all, from the perspective of potash resources, the global reserves of potassium minerals are relatively concentrated. Mainly in North America, Europe, South America, Middle East and Asia, Thailand and other countries. Among them, the proven reserves of Canada, Russia, Belarus, and Germany account for 92% of the world total.

Secondly, from the perspective of potash fertilizer production, suppliers are mainly concentrated in Canada, the former Commonwealth of Independent States and the Middle East, and are highly characterized by monopoly industries. Among them, Canada, Russia, Belarus, Germany, Israel and Jordan accounted for 88% of global production; and the world’s top five potash producers (Potashcorp of Canada, Mosaic of the United States, Belaruskali of Belarus, Kali&Saiz of Germany, Urakali of Russia) Potassium production accounts for 65% of the world's total, and exports account for more than 80% of the world's total.

“Especially in recent years, new multinational monopolistic mining groups have been involved in potash fertilizer operations and increased integration of equity among international suppliers, which has further aggravated the monopoly pattern that was originally formed and global potash fertilizer production concentration has further increased.” Feng Mingwei, for example, said For example, Russia’s Ural Potash Corp.’s major shareholder, Shervinit Potash Corp., integrated Russia’s domestic potash fertilizer production and is currently actively planning to purchase Belarusian potash fertilizer companies. By that time, adding potassium and Russian and potassium companies will monopolize 70% of the world’s total. Capacity; The mining giants BHP Billiton and Vale are actively involved in the exploration of potash fertilizers, and their production capacity has expanded rapidly, and they have continuously sought to control and merge existing potash fertilizer production companies.

Li Qiang told reporters that these international potash monopoly giants have cooperated with each other to form a global potash fertilizer price alliance in order to obtain high monopoly profits. In order to push up the price of potash fertilizer, they even joined forces to limit production to balance supply, which has led to an annual increase in international potash prices.

Potassium fertilizer has an external dependence of 60%, threatening China's food security. As a traditional agricultural country, China has a huge demand for potash, but the domestic potash resources are seriously insufficient.

According to experts from the agricultural sector, fertilizers with "nitrogen, phosphorus, and potassium" as their core are called "grain food." Potassium fertilizer, in particular, is the basic material for stable growth of grain production in China. It not only can effectively improve the quality of agricultural products and improve the resistance of crops, but also can effectively increase the use efficiency of nitrogen and phosphorous fertilizers through balanced fertilization and scientific matching. However, the distribution of potassium in soil structure in China is not balanced, especially in the soils in southern China and in the vast areas of the Yangtze River basin.

"To develop high-yield, high-quality, and high-efficiency agriculture, we must use a certain amount of potash fertilizer in a balanced manner," said Feng Mingwei. The results of the study showed that with the gradual improvement of the ratio of nutrient and nutrient, the quality of crop products increased accordingly. The ratio of nitrogen, phosphorus and potassium fertilization recommended by China's agricultural sector is 1:0.4:0.3. Based on this ratio, the actual annual potash fertilizer demand in China should exceed 20 million tons. Due to the continuous increase in international potash fertilizer market prices, domestic market demand has been curbed, and the current annual demand for potash fertilizer is around 10 million tons.

However, there is a relative shortage of potash fertilizer resources in China. According to data from the Inorganic Salt Industry Association's Potash Branch, by the end of 2008, the country’s basic reserves of potassium chloride were 364 million tons, accounting for only about 2% of global potassium chloride reserves, and were mainly liquid minerals. Ninety-five percent of them are distributed in the Qaidam basin in Qinghai, and in the north of Lop Nur in Xinjiang. At present, China's large-scale development of high-grade, easy-to-exploit potassium intercrystalline potassium resources, potassium oxide reserves of only 0.8 billion tons.

“China's potash fertilizer not only has low resource reserves, but also has a fast development speed, and it has extensive operations and insufficient sustainable supply capacity.” Feng Mingwei said that the current output can only be mined for 27 years, which is different from the world’s 200-year resource guarantee. Far away. Even in the case of restrictive protection of potassium resources in high-grade salt lakes, the traditional soluble potassium resource in China can maintain a sustainable supply capacity of up to 50 years.

The data shows that after a new round of capacity expansion, China's current potash fertilizer production has reached 4 million to 5 million tons per year, which has basically reached the maximum capacity limit, but still exists in relation to the annual demand of at least 10 million tons in China. Larger gaps require imported potash to protect domestic supplies.

“The external dependence of potassium fertilizer in China is maintained at an average of over 50%, which poses a threat to China's food security.” Feng Mingwei told reporters, according to customs statistics, China’s potash fertilizer imports in recent years were: 6.23 million tons in 2003, 2004 7.18 million tons, 5.83 million tons in 2005, 7.05 million tons in 2006, 9.91 million tons in 2007, 5.14 million tons in 2008, 1.98 million tons in 2009, and 5.24 million tons in 2010. The import volume in 2011 is expected to reach 6 million tons. The degree of foreign dependence reached 60%.

Establishing an off-season reserve system for potash fertilizers and increasing our discourse power in the international potash market China's imported potash fertilizer prices, which were finalized in the just-concluded international potash fertilizer price negotiations, increased by US$70/tonne from the first half of the year, and the price increase rate reached 17.5%. In a paper by the Industrial Association Potassium (Fertilizer) Industry Branch, this negotiation was called "a huge victory."

Feng Mingwei told reporters that "victory" is relative to the international market. The new price of imported potash for China is US$470/tonne. Compared with the imported KF CIF of more than US$550 per ton for Brazil and some Asian countries, China saves at least US$80 per ton, estimated based on a total of 2 million tons of contracted imports. Save at least $160 million for our country.

Feng Mingwei stated that this "victory" should be attributed to the Chinese potash fertilizer import negotiation mechanism. He explained that in order to protect the fundamental interests of farmers, China established a joint negotiation mechanism for potash fertilizer importation in 2005 that includes “government guidance, coordination of business associations, and joint enterprise cooperation”. The Sino-Chemical, China Agriculture, China Shipping Chemical and other import companies formed a joint negotiating team to negotiate with foreign investors. Since 2006, the price of potash fertilizer has risen sharply in the world, and China has always maintained its position as a "price defying land."

However, under the current background of further aggravation of potash monopoly in the world, in addition to continuing to strengthen the consolidation of the "joint negotiation mechanism," China should also establish a strategic reserve system for the off-season potassium fertilizer as soon as possible, that is, the establishment of a state-led, large state-owned fertilizer company to participate in the light-saving mechanism.

According to Feng Mingwei's analysis, due to the seasonal influence of agricultural production, the seasonal demand for agricultural products is outstanding, and the market price of potash fertilizer also shows obvious seasonal fluctuations. China established an off-season reserve system for potash fertilizers, aiming to establish a relatively safe stock for potash fertilizer so that “off-season reserves can be adjusted during the peak season”. The off-season reserve time can generally be selected from June to November; it is more appropriate to have an annual reserve of about 1 million tons.

“The establishment of a national off-season reserve system for potash fertilizer can first provide buffers and negotiating leverage for China’s potash fertilizer import negotiations and enhance the discourse power for potash fertilizer import negotiations. At the same time, it also has very important significance for stabilizing the domestic market.” Feng Mingwei said that the price of domestic fertilizer market The stability of agricultural products is an important guarantee for price stability. The establishment of an off-season reserve of potash fertilizers can effectively dampen the sharp fluctuations in the market price of potash fertilizers, combat speculation, achieve stable supply to the domestic market, and effectively safeguard the interests of farmers.

In addition, the establishment of an off-season reserve mechanism for potash fertilizers has increased the potash reserve from the business operations of the state to a national macro-control means. It also enhances the state's ability to regulate and control the potash fertilizer industry, maintains a healthy and orderly industry development environment, and is conducive to the scientific planning of domestic potash fertilizers. Production and circulation maximize the utility of domestic resources.

“Sinochem Fertilizers is willing to participate in the relevant work of K reserve under the leadership of relevant national ministries and commissions.” Feng Mingwei said that Sinofert is the largest fertilizer distribution enterprise in China and is the main importer of potash fertilizer. On the one hand, it owns all over the country except Tibet. 17 branches in agricultural provinces, 2,106 distribution network and 583 inland warehouses, and long-term potash warehousing and logistics agreements in 12 major ports across the country. Sinochem’s warehousing and logistics capabilities can guarantee the country’s major agricultural production. In the region, logistics can be moved forward in a timely manner; on the other hand, Sinofert has a strong financial advantage and can ensure that the light savings funds are in place in time.