The annual Central Economic Work Conference has ended. At the meeting, the three major tasks to be emphasized in 2018 are to resolve major risks, eliminate poverty and control pollution accurately. Combined with the fertilizer industry, I believe that the sharp rise in fertilizer prices may not only be a significant risk, but also may affect precision out of poverty:

First of all, the achievements of the supply-side reform are obvious to all. However, the reform will inevitably promote the rise of the PPI. In order to prevent the transmission of the PPI to the CPI, the prices of agricultural products should remain basically stable. After many years of purchasing and storage, the country has ample food reserves, which is an important reason for the CPI to remain low from 2016 to the present and has become an important guarantee for the smooth progress of the supply-side reform. If the price of chemical fertilizers rises sharply, it will inevitably increase the cost of planting peasants, decrease the planting area, speed up the de-stocking of agricultural products, and cause the price of agricultural products to rise, which in turn may lead to inflation.

Second, the focus of poverty alleviation is in the rural areas. The sharp rise in the price of chemical fertilizers will inevitably increase the cost of agriculture. If the prices of agricultural products can not be increased simultaneously, it will affect the promotion of poverty alleviation.

In fact, the government attaches great importance to the issue of rising fertilizer prices. From late November, it conducted a survey and held a price warning for the fertilizer industry and considered adding off-season reserves of chemical fertilizers. However, the actual effect is that urea prices have risen rapidly, Month or nearly 400 yuan / ton, the root cause is not accurate disease, medicine is not under the right, or even the opposite.

Crux: The result of the survey is the low fertilizer prices, affecting the supply. Although low prices affect supply, we must see: First, the price of a product requires horizontal and vertical comparison, compared with methanol, steel, coal, fertilizer prices are low, but compared with agricultural products, the price of fertilizer has been We must think about whether agriculture can withstand the price increases of nitrogenous fertilizers such as natural gas, steel and cement. Second, agricultural products and industrial products are counter-cyclically complementary. Third, as I have analyzed above, environmental protection Insufficient supply of raw materials, such as safety supervision and natural gas, poses a rigid constraint on the supply of nitrogen fertilizers, which may not be able to stimulate supply even if the price rises sharply (iron and steel, coal, etc. are examples).

Caution: In the event of a supply shortage, the price rise is inevitable. The caution does not change the supply-demand relationship. Therefore, the caution is invalid.

Light storage: In the absence of supply, prices have continued to rise, increasing light storage, tantamount to encouraging enterprises to hoarding, not to stabilize the price, but to promote the price rise.

Nitrogen export policy unchanged at the same time,reducing the export tax of three elements, there is encouragement to export Although urea domestic and international price inversion, the possibility of export is not big, but in the domestic supply has been a tight balance between the situation, the retention of every two urea will stabilize the domestic fertilizer prices to contribute, it should be through the increase of export tariffs to build a Protection levee.

Many people say that we must marketize and increase the export tariff on fertilizers as a retrogression in the market. However, we can see that the United States is regarded as the “highest” marketer: Trump has always adhered to the U.S.-preferred strategy in the interests of the United States The treaty is still tearing up the torn, Is China’s market-oriented degree higher than the national interest?

Zengyuan: Enterprises that limit production or stop production due to environmental protection allow production at full capacity and no longer be subject to environmental protection due to compliance with emission standards. Enterprises that have stopped production due to production safety problems should pay close attention to rectification and rectification as soon as possible Re-production; natural gas in ensuring the livelihood of the people, give priority to the supply of fertilizer companies; to increase light Tan Chu to increase imports.

Throttling: Resumption of tariffs imposed to curb exports.

Macro-control is China’s institutional superiority.