Interfax announced that the Chinese government would increase its export duties on nitrogen fertilizer and synthetic ammonia from 100% to 150% as of October 1. The new export duty rate will be in effect at least until the end of this year. The export duty on fertilizers not containing nitrogen will remain unchanged at 100%.
In April 2008, the Chinese government imposed an ad hoc export duty on mineral fertilizers until September 30 with the aim of stemming chemical fertilizer exports from the country at the height of the Chinese agricultural season.
We should note that export duties on fertilizers in China are a strong additional factor that contributes to the growth in mineral fertilizer prices on global markets by further cutting supply on a deficit-ridden market. Since the start of April, when China levied export duties on mineral fertilizers, world ammonia prices have surged by 59%, those of carbamide have increased by 98% and those of ammonium nitrate have surged by 93%.
Most current export duties will be valid until the end of the year, but those for nitrogen fertilizers will be increased by 1.5x further fuelling nitrogen fertilizer prices on global markets.
Almost all Russian nitrogen fertilizer producers stand to gain from this price growth, particularly; Acron (RTS: AKRN), Doroboguzh (RTS: DGBZ), KuibyshevAzot (RTS: kazt) and Tolyatti Azot (RTS: tlaz).
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