Recently, Xinjiang Uygur Autonomous Region Department of Finance issued "on the adjustment of the autonomous region of potash resources tax standards related issues notice", will be before the potash resource tax 135 yuan / ton to 400 yuan / ton, an increase of 196.3%.

In December 20, 2013, the Ministry of finance, the State Administration of Taxation issued "on the adjustment of ore and other resources tax standards notice", clearly in the number of liquid salt extraction as the number of assessment on the resources tax, tax standard 2 yuan / ton. Extraction liquids (commonly known as brine) preparation of chemical products, according to the amount of liquid salt extraction as the taxable amount on the resource tax. Accordingly, the government of the Xinjiang autonomous region according to the actual situation of autonomous region salt extraction, the reduced product potassium salt and brine extraction by the ratio of 1 ∶ 100 adjustments is 1 ∶ 200. This also means that the adjustment of refined potassium resource tax standard adjusted to 400 yuan / ton.

If you simply take the matter on its merits, it has little effect on the overall fertilizer market, because Xinjiang potash resource tax increase, the main effect of SDIC Xinjiang Lop Nor potash Co Ltd, it is the production of potassium sulphate in China's largest enterprises, and potassium sulfate in our country belongs to a kind of fat. This tax adjustment, the Luo potassium may be shifted to the downstream part. Stimulated by this, the domestic price of potassium sulfate may increase. In addition, potassium sulfate is the production of sulfur based compound fertilizer, sulfur based compound fertilizer may also steady rises.

But the author thinks, this is more important, is the implication behind the policy information -- Xinjiang potash resource tax increase is only the beginning, potential production costs will increase in fertilizer.

With the market-oriented reform pace, the future resource tax may have a new round of adjustment, and nitrogen related to coal, natural gas, and phosphate fertilizer related phosphate, pyrite, and potassium related to potassium ore, are associated with the resource tax, appear likely to adjust. Such as coal resources tax to levy ad valorem levy amount to shout for many years, always have the introduction of possible. Future mineral resource tax reform, increase efforts do not have Xinjiang, so big, but most up-regulated, basically can be sure, this also means that the fertilizer production costs will increase.

Not only is the resource tax, the chemical fertilizer enterprises enjoy many preferential policies, such as price concessions, natural gas price concessions, tax incentives, railway tariff concessions, and along with the advance of reform, these preferential policies may will be gradually cancelled, which means that fertilizer production costs will rise further.

But worrying is that, in the face of chemical potential costs continue to increase the reality, chemical fertilizer enterprises are in the big price war, prices continue to decline, urea, ammonium chloride and other products prices have hit a 10 year low, and now the production cost with 10 years ago but cannot be mentioned in the same breath. This caused the fertilizer industry situation deteriorated significantly, loss making enterprises increased sharply, the industry situation is worrying.

The enterprise competition, must not become excessive price competition, but can not compete with the lower than cost price, disturb the market order. One thousand enemy, since the loss of eight hundred, this approach is not desirable, is not sustainable. Hope the industry enterprises are to see the current situation, reasonable arrangements for the production, due to participate in the competition, benefit others, everyone can sustainable development.