As we all know, our fertilizer distributors refused to sell on credit for many years, and in the past two years, most distributors really refused to sell on credit. What does the refusal to sell on credit have to do with the drop in urea prices?

_It is understood that refusing to sell on credit means that the sales of chemical fertilizers of grass-roots distributors have decreased, because credit sales of farmers have become a common phenomenon in the past few years. Now distributors refuse to sell on credit. Farmers do not make money in planting land, lack of cash in hand, and are unwilling to invest too much in agricultural resources such as chemical fertilizers on land. Naturally, the purchasing power of farmers has declined year after year, and so on. Under the factors such as wasteland caused by land circulation, the sales of fertilizers by distributors are gradually decreasing, the more obvious the reduction of agricultural demand is, the more obvious the demand for fertilizers, especially urea, which is a simple fertilizer or raw material fertilizer, is decreasing. Refusing to sell on credit can be regarded as one of the sources of urea depreciation.

_Looking at other aspects of urea demand reduction, first of all, the proportion of urea in agricultural fertilizer has declined year after year due to the promotion and popularization of alternatives such as ammonium chloride, ammonium sulfate, high nitrogen fertilizer, nitrogen and potassium topdressing, organic fertilizer and so on. Secondly, the differential urea produced and sold by urea manufacturers in spring also has a competitive relationship with ordinary urea in summer. It is known that distributors refuse to sell ordinary urea on credit basically, but they sell differentiated urea because of slight profit and occasional sale on credit. Farmers are naturally willing to buy differentiated urea that can be sold on credit, and the sales of ordinary urea are reduced accordingly. Thirdly, no matter the price of urea purchased by the distributor, with Diammonium or compound fertilizer, the retail sales can be as high as 100-110 yuan/bag, 2200 yuan/ton or even 2300 yuan/ton of urea purchased in spring, and the effect is still good. In the latter stage, topdressing can only be sold separately. If the price of urea reached home is higher than 2000 yuan/ton, it basically depends on the money earned in spring to maintain the old customers, or to do it. Brittle topdressing does not sell urea, but only substitutes such as nitrogen and potassium topdressing. Finally, drought in Yunnan and Jilin makes the situation of urea in summer market more difficult.

_Well, some people have to say that if sold on credit, urea will not fall in price. Of course, no, the long-term consequence of selling on credit is that you can't find the peasant household who is on credit if the loss of land is serious in a certain year. It's not worth litigating. It's not worth going to other places to recover the car fee. So refusing to sell on credit is the only way for the long-term operation of chemical fertilizer. 。

_said so much about the reduction of urea demand, let's briefly talk about the other reasons for the recent decline in urea prices. First, the rapid decline in urea manufacturers'receipts is only slightly better, has not yet reached the level of rebound to stop the decline. Slow decline manufacturers are waiting for less, waiting for a new round of decline to attract new orders; Second, the relationship between the sharp fall in liquid ammonia prices, Some factories or suitable urea production, and then the sharp drop in liquid ammonia price also shows that the overall industrial demand performance is not good. The start-up rate of compound mast plants has dropped for three weeks, which has made the price of urea in Linyi from 2070-2080 yuan/ton to 1910-1930 yuan/ton. The demand for urea in industrial plywood factories and power plants can be said to be on a regular basis. Previously explained in detail, the agricultural demand has been decreasing year after year, before the last moment, the basic distributors have no funds to prepare fertilizer. Since the farmers in Shandong and other places will move after June 10, the farmers in Northeast and Northwest China will start after June 15, while the basic distributors can retreat or retreat. The urea bought back in spring in Northeast and Northwest China occupies a part, and the fertilizer gap seems not to exist. Fourthly, the export price of low-end urea in Inner Mongolia and Shanxi has just reached the exportable price level, and it still needs to be tangled whether to export or not, waiting for the real export signature, which should not bring support to urea price for the time being. Fifthly, the construction of more than 156,000 tons per day has begun, and the high level of construction in the past three years has been aggravated.

In short, the decline of agricultural demand caused by refusal to sell on credit, the slump of industrial and export demand caused by poor economic environment and the high level of urea supply are expected to continue for a short period of time, waiting for the release of agricultural demand in June, waiting for the rebound brought about by the bottom of prices or speculation or the shortage of basic stock.