Two Departments Study Cancellation of Fertilizer Freight Benefits

The reporter learned from industry sources that, recently, the National Development and Reform Commission's Price Division and the Ministry of Railways Transportation Bureau convened some large companies and related associations to solicit opinions on fertilizer rail transportation and released signals that the fertilizer tariff will be fully liberalized.

"Whether or not to cancel the fertilizer preferential freight fertilization policy, the National Development and Reform Commission and the Ministry of Railways are also under study, has not yet formed a decision-making policy." According to a person at the meeting told reporters.

At present, China's chemical fertilizer rail transportation implements preferential tariffs. According to a notice jointly issued by the National Development and Reform Commission and the Ministry of Railways in 2004, enterprises with legal production and business qualifications are required to implement agricultural chemical fertilizers for transportation of agricultural fertilizers that are included in the Catalogue of Fertilizer Products for Railway Preferential Tariffs. Freight rates.

Subsequently, in December 2011, the National Development and Reform Commission and the Ministry of Railways jointly issued the “Notice on the Implementation of the Preferential Tariff Policy on Fertilizers for Potassium and Magnesium Fertilizers”, and incorporated **potassium and magnesium fertilizers into the agricultural chemical fertilizer varieties with preferential railway tariffs. table of Contents".

According to the "Notice of the National Development and Reform Commission and the Ministry of Railways on Adjusting the Price of Railway Freight Transport," the current maximum freight rate is 0.1171 yuan per ton-km, while the fertilizer tariff is 0.0726 yuan per ton-kilometer, which is 30% lower than the average freight rate.

However, the sound of releasing fertilizer tariffs has been incessant in recent years. There have been public reports that due to the implementation of preferential tariffs, the transportation capacity cannot be “equalized” with other commodities. It is difficult to apply for wagons and shipping is very difficult.

According to public data, the apparent consumption of fertilizer in China was 62.73 million tons in 2010, of which the ratio of nitrogen, phosphorus and potassium for agricultural fertilizers was 1:0.36:0.18. Every year, long-distance chemical fertilizer transportation mainly relies on railways.

For the fertilizer tariffs that may be pushed up after the cancellation of the transportation preferential policies, there are suggestions on the day's forum. The resulting increase in fertilizer prices can be returned to the farmers through direct subsidies.

The fertilizer industry currently enjoys more preferential policies, such as preferential electricity prices, favorable natural gas prices, limited coal price caps, fertilizer transportation price concessions, and direct subsidies for prices of fertilizer products, which reduce the production costs of fertilizer companies to varying degrees.