In late Feb. 2020, manufacturers in many provinces said that they faced shortfalls in supplies of monoammonium phosphate and diammonium phosphate due to the impact of COVID-19. Nevertheless, CCM estimates that the shortfalls will be replenished within a month as production and logistics gradually recover.
At the news conference held by the Joint Prevention and Control Mechanism of the State Council of China on March 5, Zhang, Director of the seed industry management department of the Ministry of Agriculture and Rural Affairs, said that 92% of the 362 key seed agricultural enterprises have resumed work. Due to the fact the Hubei province is short nearly 2,000 tons of agricultural chemicals, 156 agricultural enterprises promise to provide chemical supplies for the province.
Zhang also said that the total annual supply
of seeds, pesticides, chemical fertilizers and agricultural film was always
more than the demand, and the provided agricultural supplies could be increased
to twice the typical annual agricultural supplies. Currently, the main problem
is a break in the production chain of agricultural supplies. Lately, the Ministry
of Transport of China and the Ministry of Agriculture and Rural Affairs
announced an emergency notice of a spring transportation service guarantee of
agricultural production materials. It is said in the emergency notice that each
province should provide an easy access when it comes to transporting
agricultural supplies. Enterprises should print out an entry-exit pass for
vehicles transporting agricultural supplies from the government website. Those
vehicles with a pass should not be pulled over, checked, or charged fees.
According to feedback from 25 provinces and 1500 counties in China, roads and
paths in cities and villages are mostly clear, and vehicles transporting
agricultural supply can easily travel along the roads.
Agricultural production enterprises resume work and begin producing supply
Recently, many agricultural enterprises
have resumed work. 92% of the 362 key seed agricultural enterprises have started
to work again, and the overall production level is at 62% of the level prior to
the virus. Other enterprises have also
resumed work, including 69% of fertilizer urea enterprises, 62% of monoammonium
phosphate enterprises, 61% of diammonium phosphate enterprises, 88% of potash
fertilizer enterprises, and 51% of compound fertilizer enterprises. 70% of the
1,400 pesticide enterprises have also resumed work.
Hubei Province is now following the
requirements of the farming season in China so that agricultural enterprises
can organize arrangements for agricultural supply. Early rice seeds were prepared
by March 10. Rice seedlings were raised by March 15, and the preparation for
wheat’s agricultural chemicals was completed by March 20. Middle-season rice
seeds should be prepared before April 10.
Fertilizer prices low but expected to increase as agriculture resumes
According to research, the price of fertilizer
will rise between RMB 50 from RMB 150 per ton. Affected by COVID-19, the demand
of fertilizers has been stagnant. With
the better control of COVID-19 in China, the agricultural enterprises have resumed
work, and the demand for fertilizers has increased. According to China’s
Agricultural Means of Production Association, the current price of various
fertilizers is lower compared to the same period last year. For example, the
wholesale price of carbamide is now RMB 1,885 per ton, and the retail price is
RMB 2,070 per ton, which is a decrease of 7% and 0.35% compared to the same
period last year. A 5%-10% decrease can also be seen on the prices of Diammonium
phosphate, potassium chloride and compound fertilizer.
For more information on China’s fertilizer market, please check our Phosphorus Industry China Monthly Report.