Grain/Fertilizer Price Ratio Conducive to Fertilizer Consumption

By CnAgri2013-02-01 11:19:06 Print     Thanks to grain price growth, grain/fertilizer price ratio generally moved up 1 ~ 3% in 2012 over the previous year, conducive to fertilizer consumption. Only wheat/urea and japonica/urea price ratio dropped slightly.
 
    In terms of fertilizer nutrient price, wheat/urea, wheat/DAP and wheat/NPK price ratio recorded 0.44, 0.4 and 0.35 respectively; Corn/urea, corn/DAP and corn/NPK price ratio recorded 0.49, 0.45 and 0.39 respectively; Japonica/urea, japonica/DAP and japonica/NPK price ratio recorded 0.9, 0.81 and 0.7 respectively; Indica/urea, indica/DAP and indica/NPK price ratio recorded 0.81, 0.74 and 0.52 respectively, up 2.5%, 6.6% and 4.7% respectively on the year-on-year basis.
 
    On the other hand, grain price growth was largely offset by the increased cost of production, despite increased subsidy. On the whole, the returns from grain production stayed low, which might subdue fertilizer consumption.
 
    It is presumed that the cost of grain production, the government’s subsidy and grain price may keep growing in 2013. Fertilizer price is predicted to move up 5% in 2013 but during spring plowing, summer planting and fall planting fertilizer price may rise more than 10%.
 
    It is anticipated that grain/fertilizer price ratio may be slightly beneficial to farmers this year. Wheat/urea and wheat DAP price ratio is predicted to be 0.43 ~0.45 and 0.40 ~ 0.42 respectively.

From “China Fertilizer Market Weekly Report”