Chinese fertilizer enterprises make a lot of money because of high prices

Covid-19 caused a disruption in the supply chain, greatly affecting the supply of fertilizers. After that, the war in Ukraine continued to affect this market.

Russia is the world’s largest fertilizer exporter. In 2020, this country earned 7 billion USD, equivalent to 12.6% of the global export turnover of this item. China is the world’s second largest exporter with $6.6 billion.

According to World Bank data, the fertilizer price index was 237.6 in March, up 1.3% year-on-year, the highest since 2008.

According to the National Bureau of Statistics of China, as of early May, the price of urea was 2,934 yuan per tonne ($436 per ton), up 32.7% year-on-year. The price of mixed fertilizer was 3,861 yuan/ton ($574/ton), up 55.2% over the same period in 2021.

The price of sulfur, one of the key phosphate feedstocks, has risen more than 70 percent since February.

Thanks to high prices, many Chinese fertilizer companies experienced high growth in the first quarter of the year. 12 companies saw net profit increase more than 100% in the first quarter compared to the same period last year, notably Asia Potash International Investment Guangzhou up 1,499%, Kunming Chuan Jin Nuo Chemical up 1,192% and Jiangsu Chengxing Phosph-Chemicals Co. 700% increase.

However, manufacturers in China are also facing a number of challenges such as government control of exports, difficulties in transportation because of Covid-19. As a result, China’s exports in the first quarter of this year were 4.2 million tons, down 33.2% year-on-year.

Thep Subchina, the market continues to be in short supply this year as Russia and Belarus are subject to Western sanctions. The price of potash this year may be 3 times higher than in 2021. Experts estimate that the increase in fertilizer will greatly affect global food prices. Faced with the above situation, farmers in many parts of the world have begun to use organic nutrients they produce and mix together to save input costs for agricultural production.

Do Lan