Fertilizer exports face two "stumbling blocks"

Will soon enter the low-tariff fertiliser export period. From June 1, the monoammonium phosphate and diammonium phosphate exports will first enter the low-tariff period and carry out a low tariff of 7% below the benchmark price; one month later, July 1 At the beginning of the day, urea exports also entered the low-tariff period, which is also the implementation of a low tariff of 7% below the benchmark price. Compared with the current high export tariff of 110%, the tax rate in the low-tariff period is greatly reduced. This is very favorable for exports, and many people are looking forward to the export of chemical fertilizers. However, judging from the current situation, the export of fertilizer companies face two “stumbling blocks”.

One is whether the export base price includes tax. The current fertilizer export policy is that 110% of export tariffs are levied on exports during peak season. In the off-season, when the export price is not higher than the benchmark price, 7%; when the export price is higher than the benchmark price, the tax rate = (1.07 - benchmark price / export price) × 100%, the export of urea, monoammonium phosphate, diammonium phosphate The benchmark prices are 2,100 yuan (t price, the same below), 2,900 yuan, 3,400 yuan.

In late March, the Nitrogen Fertilizer Industry Association and several domestic large-scale urea production enterprises reported to the Ministry of Finance and the National Development and Reform Commission. At that time, the Ministry of Finance explained that the export price of urea in the off-season explained that the benchmark price of 2,100 yuan to be implemented this year should be Excluding the price of tax, and said that it will explain it to the customs in the future. According to calculations, the difference between urea-containing tax and tax-free price is about 144 yuan. If the benchmark price is not included in the tax, it is equivalent to 1900-2,000 yuan ex-factory price of urea, and it can also enjoy a low tariff of 7%; if you think If the benchmark price is tax inclusive, then the urea ex-factory price will only be approxi- mately 1,760 to 1,850 yuan. Now, the urea production cost is generally above 1800 yuan, which is obviously unfavorable to urea plants.

When everyone thought that the benchmark price did not include taxation, it was reported that the customs did not agree, and it has not been seen so far that a new document with a base price that does not include tax was introduced. According to analysis by some industry experts, the Customs has thousands of export goods, and it is difficult to give green light to individual fertilizer exports alone. As a very strict law enforcement department, we must emphasize the seriousness and fairness of the law. Taxes, what about so many other varieties?

Whether or not the benchmark price includes tax has not yet reached a final conclusion. Relatively speaking, the impact on urea is greater than that of ammonium phosphate. Currently, the profit status of ammonium phosphate exports is relatively good. If the benchmark price includes tax, it will only reduce the profits of some companies. In accordance with the current international market prices, urea is positive on the verge of being exportable. If the taxes are included, it may seriously affect the export volume and the impact is relatively large.

The second issue is the appreciation of the renminbi. On April 29, the central parity of the renminbi against the US dollar was reported at 6.4990 yuan, for the first time it broke through the integer mark of 6.50 yuan and reached a new high since the exchange reform. Since the second exchange rate reform in June last year, the renminbi has appreciated about 5% against the U.S. dollar. In the first quarter of this year, the appreciation rate of the yuan against the U.S. dollar reached 1.3%, and the cumulative appreciation in April was 0.88%, setting a new monthly high during the year. The appreciation of the renminbi is showing speed. Speed ​​up the trend.

The appreciation of the renminbi is detrimental to exports. For example, at the beginning of April, the exchange rate of the renminbi against the U.S. dollar was around 6.55 yuan. In the future, if the appreciation of the renminbi to the U.S. dollar is 6.45 yuan, a certain enterprise will export a batch of urea, and the export FOB price will be 350 U.S. dollars per ton. Up to 35 yuan, basically a 1% appreciation of the renminbi, export profits will have to reduce 1%. The rapid appreciation of the renminbi has a huge impact on exports.

However, the key issue for exports is still international prices. If the international prices are high, both of these problems can be ignored. According to calculations, if China’s urea export FOB price can reach more than US$370, exports will be relatively smooth, and then the benchmark price issue and RMB appreciation will no longer be a big problem. At present, the international urea price has gradually come out of the trough and has continued to rise in the recent period. This is a good thing for urea exports. The international price of ammonium phosphate has been consolidating at a high level. Overall, there are certain opportunities for the export of fertilizer companies.

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