Chinese fertilizer crisis in addition to overcapacity, the new crisis is emerging, and that is a drop in demand. March 18 this year, the Ministry of Agriculture issued the "2020 to zero growth in fertilizer use Action Programme", aims to "2015 to 2019, and gradually the amount of fertilizer use control in less than one percent annual growth rate; strive to 2020, the main crop fertilizer use to achieve zero growth ", but the file does not look terrible implementing measures, and therefore" decline in demand "was not expected to pay sufficient attention to the market. And a series of recent events, making fertilizer demand might drop goal ahead of schedule.
On the one hand is the decline in fertilizer demand caused by the downturn in agricultural prices. This year there have been major domestic agricultural prices fell, as a barometer of the market price of corn in Northeast and Inner Mongolia State Reserve lowered by more than 10% of the purchase price, the acquisition of a substantial increase in quality requirements, equal on the basis of price protection on further down the purchase price, and not to implement a minimum price protection areas, corn price drop even lower. One reason for this situation of international and domestic prices of agricultural products severely upside down, although the three major staple food import quota management, but substitute imports soared; the second is the high level of food stocks, the three major staple food consumption inventory ratio reached 40% or more, much higher than the internationally recognized warning line of 17 percent, purchasing and storage capacity of an emergency, the financial burden; Third, weak economic growth, oil prices fell sharply, resulting in sluggish industrial demand. Although having just need to produce features, but there is no essential difference with the economic laws of industrial products, which means that Chinese agricultural prices to rise, first compression supply, complete the destocking process that will not happen overnight, so the downturn in agricultural prices It will last for a long period of time.
Downturn in agricultural prices will result in some harsh conditions of farming land to give up farming, land contractors loss reproduction face difficulties cropping index down, down fertilizer levels and other issues, causing a decline in fertilizer use.
On the other hand is the agricultural policy of national and local tiaojian acreage decline brought fertilizer demand. November 2, the Ministry of Agriculture issued the "Guidelines on restructuring corn sickle curved region", and strive to 2020, corn acreage stable at one million hectares, 5000 acres or more than the current reduction, focusing on the development of silage corn, soybeans , high-quality forage, grains and beans, wheat, economic and ecological functions of fruit plants; November 3, the CPC Central Committee issued a "recommendation on National Economic and Social Development Five-Year Plan" put forward to explore the implementation of arable land fallow rotation system pilot; as early as last September, Hebei Province, the Agriculture Department released proposed agricultural planning "appropriate areas with groundwater overexploitation Yajian rely on groundwater irrigation in winter wheat acreage, changing wheat and maize double cropping system one harvest a year, and the project area Yajian wheat acreage farmers to give some subsidies. "
The introduction of a series of documents of the above indicates that China's grain production to be encouraged by the appropriate strategy to inhibit the supply of a major shift. Downturn in international prices of agricultural products of strategic opportunities in the domestic food stocks consumption is relatively high, excessive land use, environmental degradation, the 调减 agricultural acreage, land achieve respite undoubtedly the right choice. Full implementation of these policies will inevitably cause a decline in acreage and reduce fertilizer needs.
In summary, the policy level factors and market factors will lead to decreased levels of future fertilizer demand, the decrease although it is difficult to predict, but the trend is very clear, down overcapacity superimposed demand, the fertilizer market outlook is bleak.