Phosphate and Compound Fertilizer Association: Putting risk aversion in the first place

"Faced with the impact of the new crown pneumonia epidemic and geopolitical conflicts, we must forward-lookingly predict the changes in the influencing factors according to the bottom line thinking, and put risk aversion first
.
" This is the 2022 Fertilizer 2022 held online on April 29.
At the market and international trade seminar, Li Guang, secretary general of China Phosphate and Compound Fertilizer Industry Association, conveyed the keynote of the latest development of the industry
.

Li Guang said that due to factors such as the current global epidemic, currency circulation, and the situation in Russia and Ukraine, cost and exchange rate risks are prominent
.
The primary task of production enterprises is to reduce cost risks by fast in and out, and avoid exchange rate risks by mastering the rhythm of the market
.

Last year, in order to ensure national food security, the phosphate fertilizer industry suffered from high raw material prices and cost inversion.
However, under the precise control of national policies, relying on its stable supply capacity and the self-discipline of enterprises, it not only guaranteed the sufficient phosphate fertilizer market.
Supply has also become a depression in global phosphate fertilizer prices
.
Although effective measures have been taken in China to ensure the stability of product prices, various factors and problems affecting the development of the phosphate compound fertilizer industry still need to be seriously faced
.

Li Guang said that in the short term, the industry faces problems such as improved access standards, high raw material prices, adaptive adjustment of marketing models, and industry reshuffles
.
As far as industry access is concerned, the current access conditions will be strictly implemented in terms of industrial structure adjustment, advanced energy consumption level, improvement of utilization rate of phosphogypsum or harmless treatment, etc.
, requiring enterprises to promote industrial transformation with technological innovation
.
In terms of coping with high-priced raw materials, enterprises should improve the forward-looking prediction of price, maintain a dynamic balance by establishing a long-term cooperation mechanism for raw material procurement, adjusting product formulas in a timely manner, and ensuring the safe and rapid return of capital turnover
.
In terms of marketing models, enterprises must have a long-term awareness of dealing with risks and avoid cross-border extension and investment risks brought about by the extension of the marketing chain
.
The industry reshuffle is also inevitable, and the industrial integration of super-large enterprises with backbone and small and medium-sized enterprise clusters specializing in specific products is unfolding
.
Especially after the outbreak of the epidemic, the market re-division of super-large enterprises and specific product manufacturers has quietly started, and enterprises should fully understand this
.

Li Guang further emphasized that in the long run, the industry will still face many responsibilities such as maintaining food security, ensuring the supply of chemical fertilizers, and saving energy and reducing consumption
.
In terms of maintaining food security, losing weight and increasing efficiency will always be a policy requirement.
To improve soil through the replacement of organic fertilizers to achieve the international replacement rate of 50%, this is the requirement for the long-term development of the industry
.
Therefore, enterprises should build a production method and development vision that combines organic and inorganic fertilizers to break the opposition between products
.
In terms of ensuring the supply of chemical fertilizers, companies should focus on achieving negative growth by increasing the absorption rate, and at the same time increasing the proportion of the application of special fertilizers with effective additives
.
In terms of energy conservation and consumption reduction, enterprises should prepare early to avoid the disruptive impact of the "dual carbon" strategy on the industry, and put standardized management on the agenda
.
Enterprises should also pay attention to self-protection in the adjustment of the industry, such as moderately increasing the industrial proportion of medium and low concentration phosphorus compound fertilizer products, exploring the import of phosphorus resources, and developing a fine phosphorus chemical industry that matches the market capacity
.

Li Guang finally said that as the country attaches more importance to chemical fertilizers, the rationality and timeliness of policy adjustments are increasing, and production enterprises must build confidence, ensuring supply and sustainable development of the industry will be a must for policies
.