China extends price intervention to fertilizer
Updated: 2008-01-22 21:46
The National Development and Reform Commission (NDRC), China's top economic planner, has announced on Tuesday that it will extend a price control policy to fertilizer, a move to protect the enthusiasm of farmers and the country's food security.
A senior official with NDRC made the announcement at a warning conference on price control of fertilizer.
He said that fertilizer makers run by the central government should not raise the ex-factory prices of urea while fertilizer manufacturers run by local governments should strictly control their ex-factory prices of urea, phosphate fertilizer as well as compound fertilizer. And other companies were required to submit a report for official approval when they intended to raise prices.
The interim price intervention covers the spring plowing period.
According to the government's policy, the price and market regulation agencies have the right to ask the enterprises to return the prices to normal or reduce the price rise range if the rise is considered unacceptably large.
The forecast for continuous price rises was prevailing before the government extends price intervention to fertilizer.
Statistics show the ex-factory prices of urea and compound fertilizer have surged to 1,725 yuan/ton (US$238.6/ton) and 2,600 yuan/ton(US$359.6/ton), respectively, both up more than 30 percent year-on-year.
Analysts attributed the price rises in fertilizer to international price interaction, cost increase and China's lack of phosphorus and potassium resources. The offshore price of urea in the Black Sea has reached US$400/ton, up 30 percent over the previous year. And the ex-factory price of monoammonium phosphate (MAP), which is the main raw material to produce fertilizer, has climbed to 3,100 yuan/ton from 1,800 yuan/ton early last year in China.
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