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Summer Fertility: A Gamble without Gambling Skills
Time:2019-04-21   Read:633second  

With the approaching of the season, the fertilizer market in many places began to sweep away in spring. The terminal stock is far more than 70%, and the space for partial surplus replenishment is very limited. Then, the fertilizer market officially appeared in summer. At present, the overall atmosphere is not warm, the new orders of enterprises are not ideal, and the enthusiasm of downstream picking up goods is not high. Similar to the situation in early spring, this summer's fertilizer market may return to a relatively lagging.

Besides the price of compound fertilizer is obviously higher this spring than the same period in previous years, the lower level of crop prices and abnormal local climate conditions also directly reduce the enthusiasm of downstream planting. However, most dealers are most worried about the "off-season price rise, peak season price fall" magic is difficult to break, high prices to take goods, upside-down sales often occur, for them. In summer, the so-called operation in the fertilizer market is just a gambling game.

Firstly, the raw material market is difficult to predict. The price of compound fertilizer will largely be determined by the cost of raw materials. The rise and fall of raw material price will certainly drive the price of compound fertilizer. Obviously, the price of compound fertilizer has risen with the rise of the price of nitrogen, phosphorus and potassium this spring. However, in view of the recent fluctuation of the market, not only the price of compound fertilizer has become a puzzle, but also the release of downstream demand has been restrained. Taking urea as an example, the domestic and international environment can have a greater impact on its market trend. Recently, a series of uncertainties have caused a lot of suspense in the domestic urea market. In order to ensure adequate supply in the coming sales season, many distributors can only reluctantly participate in the gambling.

Secondly, upstream supply is difficult to control. So far, the overall start-up rate of large-scale compound fertilizer enterprises throughout the country has maintained around 50%. Since spring, it has been rising slowly. For the time being, the production and marketing are relatively balanced, but the supply of fertilizer enterprises may be tight at different stages. The first reason is that the environmental protection inspection is becoming more and more normalized. The environmental protection supervision and "looking back" work initiated by the government at the beginning of the year are once again the students of fertilizer enterprises. Production has brought pressure, the situation of production restriction will inevitably arise; the second reason is the large-scale implementation of safety inspection, although the pressure of fertilizer enterprises is relatively small, but for enterprises with potential production safety risks, therefore, whether the upstream supply is normal will also bring risks for dealers.

Finally, the turmoil in Feicheng is difficult to calm down. According to the survey of China Fertilizer Network, another reason why fertilizer distributors are more and more difficult to operate is that there are too many chaotic phenomena in Fertilizer City, such as falsehood, suboptimal and so on. Once the price of regular brand compound fertilizer exceeds the psychological expectation of distributors, the mood of taking goods naturally deteriorates, thus bringing opportunities for low-price supply. One reason is that farmers have insufficient funds to collect fertilizer. In recent years, the price level of field crops is at a low level and the profit of planting is very limited. The other reason is that some of them suffer from bad weather in successive years, and the situation of crop production reduction is not rare. In the case of sluggish demand, the fertilizer market is becoming more and more chaotic, and dealers are facing more and more challenges.

In summary, the trend of raw materials, supply situation and market atmosphere all affect the development of fertilizer market in summer. Although the future market is full of suspense, compared with the spring market, the progress of high nitrogen corn fertilizer is more difficult under the recent urea high volatility.

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