The market will no longer have low-priced fertilizers

Since May, the fertilizer market has set off a new round of rising tide
.
One of the most prominent features is that fertilizers with relatively low prices in the past have made strong supplementary increases
.
It can be said that there will be no low-priced fertilizers in the fertilizer market since then
.

First look at potassium sulfate

The Mannheim process potassium sulfate uses potassium chloride as the raw material
.
From a production point of view, the price of potassium sulfate should be higher than that of potassium chloride
.
At the same time, the price of potassium sulfate will rise and fall synchronously with the price of potassium chloride
.
However, in the first few months of this year, the price of potassium chloride has risen sharply, the price of potassium sulfate has not risen, and the increase is far lower than that of potassium chloride, and even in certain periods, the price of potassium sulfate has been higher than the price of potassium chloride.
Low anomalies
.
Since May, the potassium sulfate market has exerted significant force, and the price has continued to rise for more than one month, with a cumulative increase of 300 to 400 yuan (ton price, the same below)
.
By the end of June, the ex-factory price of 52% fully water-soluble powdered potassium sulfate by Mannheim method was around 5,500 yuan, and the arrival price of resource-based 52% powdered potassium sulfate was around 5,400 yuan, hitting a new high in recent years
.

Look at compound fertilizer

Like potassium sulfate, compound fertilizer is also a relatively small variety in the first few months of this year
.
The reason is that compound fertilizers are mainly used by end-consumer farmers, while elemental fertilizers such as urea, monoammonium phosphate, and potassium chloride are mainly used as compound fertilizer raw materials for production enterprises, and farmers do not use them directly
.
On the one hand, there are many compound fertilizer manufacturers, and on the other hand, it is necessary to consider whether farmers can accept it
.
However, since May, the compound fertilizer market has experienced a sharp rise, with a monthly increase of about 400 yuan, which is higher than that of simple fertilizers
.
By the end of June, the ex-factory quotation of 45% sulfur-based compound fertilizer had reached an ultra-high level of 4,100-4,300 yuan
.

Finally, look at Xinjiang urea

The annual output of urea in Xinjiang is about 5.
7 million tons, the agricultural demand is about 3 million tons per year, and the industrial demand is about 1 million tons per year, showing an obvious oversupply state
.
In addition, the local area has abundant coal resources and natural gas resources, and the production cost of urea is low
.
Therefore, in the past, Xinjiang was the urea market with the lowest price in the country, and it was normal for the ex-factory price to be 200-400 yuan lower than that of other regions
.
However, from May to June this year, under the influence of factors such as the increase in the local planting area, the increase in market demand, and the tight supply of local supplies, there was a surge in the Xinjiang fertilizer market, and the highest ex-factory quotation of urea reached 3,200 yuan
.
At that time, the ex-factory quotation of urea in Shanxi was around 3,150 yuan, and there was an abnormal phenomenon that the price of urea in Xinjiang was inversely higher than that in the mainland
.

The strong compensatory rise of the domestic fertilizer market shows that the current fertilizer market is very hot
.
Just like the stock market, when it is in a big bull market, the stock market rises one after another, and all sectors will rise one round
.
Once it is found that a variety has not risen much and has a price difference with other varieties, speculative funds will flood in, and the stock price of this sector will rise rapidly
.

The strong compensatory increase in this round of fertilizer market is also related to the following factors:

Changes in market mentality

Although the price of fertilizer has risen in a mess this year, many people do not feel that the price is high, and the fertilizer market has no "aversion to heights"
.
Because compared with the price of 1,000 US dollars in the international fertilizer market, the domestic fertilizer price is indeed low
.
Therefore, once there are varieties with relatively small increases, the prices of these varieties are easily pulled up
.

Sellers take the initiative

This year's fertilizer market is a typical seller's market
.
Whether or not the price rises, and how much it rises, it is up to the sellers to have the final say.
They have the right to speak and set prices, and buyers basically only have to follow orders and pay according to the price
.
In order to maximize profits, sellers never think the price is too high.
As long as they find an opportunity, they will raise the price without hesitation
.

Farmers' tolerance for high-priced fertilizers increases

In response to the damage to farmers' interests caused by rising prices of agricultural materials, the minimum protection price of grain has been raised in an all-round way this year, and two agricultural subsidies have been launched at the same time
.
The farmers' increased tolerance for high-priced fertilizers also indirectly supported the high prices of fertilizers, benefiting the fertilizer market
.

Specifically, the minimum purchase price of summer grain has been raised across the board this year
.
This year, the country will continue to implement the minimum purchase price policy for wheat and rice in some major producing areas.
The State Administration of Grain and Reserve announced that the minimum purchase price of wheat, early indica rice, mid-late indica rice, and japonica rice this year is 115 yuan, 124 yuan, and 129 yuan per 50 kilograms, respectively.
Yuan, 131 Yuan, an increase of 2 Yuan, 2 Yuan, 1 Yuan, and 1 Yuan respectively over the previous year
.

The Ministry of Finance announced on May 22 that, taking into account the market price trend of agricultural materials and the situation of agricultural production, the central government issued a fund of 10 billion yuan to once again issue a one-time agricultural subsidy to farmers who actually grow grains
.
The Ministry of Finance announced in March that the central government allocated 20 billion yuan of funds to provide one-time subsidies to farmers who actually grow grains
.
Cai Hailong, a professor at the School of Economics and Management at China Agricultural University, said that this year, a total of 30 billion yuan in one-off subsidies was issued twice this year, or about 17 yuan per mu
.
In addition to the one-time subsidy, farmers also enjoy a variety of subsidy policies such as farmland protection subsidy, rice subsidy, corn and soybean producer subsidy, and crop rotation subsidy
.
These subsidies jointly protect farmers' income from growing grain
.
The increase in the price of agricultural materials has eroded the profit margins of grain farmers.
In this context, the two increases in agricultural materials subsidy funds are a direct reflection of ensuring farmers' income from grain planting
.