China-US Trade Agreement Won’t Bring Great Direct Influence on Chinese Fertilizer Market

On December 13th, China and the US reached the first-phase agreement on trade. China would increase the imports of agricultural products from the US, and the US would cancel the tariffs of products from China in phase. Overall, reaching a trade agreement won’t bring direct influence on fertilizer market. The main reasons are as follows:
 
On the one hand, before the trade frictions, the trade volume of fertilizer between China and the US was extremely limited. China fertilizer imports in 2017 were 9.18 million MT, of which the imports from the US was less than 0.1 million MT, only taking up 1% in the total; China’s fertilizer exports in 2017 totaled 25.48 million MT, of which the exports to the US were less than 0.4 million MT, only accounting for 1.6%.
 
On the other hand, the situations of fertilizer supply in China and the US were almost the same. In the US, the supply of N-fertilizer and P-fertilizer can meet the demand, and K-fertilizer production can’t meet the demand of consumption. In China, the supply of N-fertilizer and P-fertilizer still can meet the demand and some of them are for exporting; the degree of self-sufficiency of K-fertilizer is around 60%, and the remaining gap can be met through the imports. Both parties are not complementary in the trade of fertilizer. Meanwhile, in consideration of relatively high production costs of fertilizer products in China, there is weak competitiveness on the international market, so fertilizer is less likely to be traded in a large scale in the future.
 
So reaching the trade agreement won’t bring great influence on Chinese fertilizer market, but would bring indirect influence on domestic fertilizer consumption.