Why can't the 2016 Spring fertilizer market lift

According to reason, this year's spring fertilizer market should not be so bad, early dealers because of fear of taking risks, generally dare not a large number of winter storage, resulting in low social inventory; And now the price of fertilizer is not high, urea and other varieties have returned to the price of more than ten years ago, the risk can be said to be quite small. Spring fertilizer season is coming, the price is so low, why do dealers dare not take goods? What is the reason for such a depressed market?

According to the author's analysis, there are two main reasons: First, market confidence is seriously insufficient. Now there is a general fear of fertilizer production capacity in society, that fertilizer production capacity is too large, only use cash to buy is the right way, there is no risk. Even if the price is low, as long as the goods are stored, some people are uneasy and afraid of falling prices.

Actually capacity and output are two different things. The capacity is large, the operating rate is not high, and the output is not high. Taking nitrogen fertilizer as an example, according to the statistics of China Nitrogen Fertilizer Industry Association, the national nitrogen fertilizer production in 2015 was 46.7 million tons, an increase of 2.5%. Urea production was 68.5 million tons in kind, an increase of 3%. In 2015, the export volume of nitrogen fertilizer reached 9.963 million tons of pure nitrogen, an increase of 12.5%. The export of urea was 13.75 million tons, up 1%. In 2015, domestic nitrogen fertilizer production and sales were balanced, and the increase in production was mainly digested by exports. If we look at the supply and demand relationship alone, the price of nitrogen fertilizer should not have fallen so sharply. However, due to the lack of market confidence, one-sided exaggeration of the negative role of overcapacity, "three into a tiger", pessimism intensified, resulting in more bearish market. Therefore, it is necessary for industry associations and media to tell you the real market situation, so as not to cause unnecessary panic.

Second, the fall in the price of agricultural products has a relatively big impact on the market. Since September last year, the price of corn, wheat and other grains has changed from the previous firm rise to a decline, and corn has plummeted by more than 30 percent. And it's not just food prices that are falling. So are many cash crops, such as fruits and vegetables. Xinning County, Hunan Province is a famous hometown of navel oranges, after the Spring Festival, farmers still have a large number of navel oranges unsold. In previous years, the purchase price is about 2 yuan per catty, and now it is only 60 cents a catty, and it can not be sold, while farmers' planting costs are about 1 yuan a catty, and some farmers cut the navel orange tree with tears. After the price of agricultural products fell sharply, the negative impact on the fertilizer market was great, some farmers did not know what to plant, and dealers did not dare to stock up, for fear that the fertilizer could not be sold or the goods did not sell.

How to break this deadlock? The author believes that the fertilizer industry must find a way out from two aspects: first, on-demand production. In the past, we have always had a concept that fertilizer manufacturers should produce at full load and high load during spring ploughing to support agricultural production. This is correct in the case of short supply in the fertilizer market, but now the market has changed significantly, in the case of overcapacity and oversupply, enterprises should insist on on-demand production, farmers need to produce as much as they need, what varieties they need to produce, focusing on the use of economic load method to organize production.

Second, we should enhance confidence. At present, low stocks of fertilizer are a big favorable factor for this year's spring ploughing. According to the statistics of the supply and marketing cooperatives, the nitrogen fertilizer inventory of the national supply and marketing cooperatives system fell by 2 million tons year-on-year, a decrease of 20%, and the circulation enterprises outside the system may decline more. The lack of inventory could be an opportunity for the fertilizer market this spring. In addition, in response to the low enthusiasm of dealers for goods, manufacturers can increase direct sales efforts to sell fertilizers directly to farmers, which is a good thing for both manufacturers and farmers.