The reporter learned yesterday from the China Petroleum and Chemical Industry Association that current chemical fertilizer manufacturers are well-stocked and actively ramping up production. Combined with the nation's 7.7 million tons of off-season reserves, the domestic supply of fertilizers and pesticides is expected to meet market demand this year.
According to an official from the association, with the complete abolition of agricultural taxes and the government’s efforts to regulate land use, the total area under cultivation is expected to rise in 2006, leading to increased fertilizer demand. However, improved fertilization practices and the adoption of formula fertilization will help prevent a sharp rise in overall usage. While nitrogen fertilizer demand is expected to grow slowly, demand for phosphate and potash fertilizers is likely to rise more rapidly. The Ministry of Agriculture estimates that chemical fertilizer consumption in 2006 will reach approximately 58 million tons, requiring around 300,000 tons of pesticides.
On the supply side, several major projects have come online, including Sinopec's Baling, Anqing, and Jinling coal-to-oil facilities. The Liaoning Huajin Group’s large-scale fertilizer project in Xinjiang has also started operations, and Shanxi Jincheng’s “1830†project is now running. Additionally, many plants that were not fully utilized in 2005 are expected to increase urea production by 1.5 to 2.5 million tons in 2006. Phosphate fertilizer output is projected to rise by 1 million tons, reaching 11.8 million tons.
As the spring plowing season approaches, local fertilizer and pesticide producers are fully prepared. To ensure adequate supplies for farming, the National Development and Reform Commission and the Ministry of Finance organized two batches of commercial storage through public bidding, totaling 7.7 million tons. The state also provided interest subsidies to storage companies. With export restrictions on urea and high tariffs in place, domestic fertilizer supplies are well-secured, even during off-peak seasons. Moreover, production and distribution companies have built up significant inventories, ensuring a stable supply for the coming season.
According to further information, the government’s “supporting agriculture†policy has driven strong growth in the production of fertilizers and pesticides in 2005. Statistics show that national fertilizer output reached a historic high of 41.88 million tons, a 10.7% increase from the previous year. This exceeded the target set under the 10th Five-Year Plan by nearly 8 million tons, reaching 41 million tons. Pesticide production also saw notable growth, reflecting the country’s continued investment in agricultural input sectors.
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