The first state-owned potash fertilizer auction in the Chinese New Year was
June 12, 2024, 9:21 AM
China Agricultural Media
2502
Guide
Highlights at a glance
China and Canpotex finalized a 2022 seaborne potash import contract at $590/ton CFR, matching India’s price and marking a sharp rise from $247/ton in 2021. This surge increases pressure on compound fertilizer costs, driving more companies to participate in state reserve potash auctions. In 2022, 15 new firms joined the auction pool. The first round saw intense competition, with Genlituo Biotechnology offering a terminal retail price as low as 2,330 yuan/ton—far below previous levels—sparking concerns over profitability. Despite potential losses, companies like Genlituo cite national responsibility, support for struggling farmers, and promotion of sustainable agriculture as key motivations. The government’s strategy aims to stabilize fertilizer prices, ensure spring farming supply, and safeguard food security by channeling low-cost potash through compound fertilizers to end-users, encouraging industry-wide social responsibility.
Following the Indian potash fertilizer contract, on February 15, China and Canpotex reached a seaborne potash fertilizer import contract, and the standard potassium chloride import price in 2022 was determined to be CFR590/ton, which is the same price as the Indian potash fertilizer contract just signed. , compared with 2021 (CFR247 US dollars / ton), an increase of 343 US dollars / ton, this high price will undoubtedly put more pressure on the cost of compound fertilizers, and also make more compound fertilizer companies begin to pay more attention to the state reserve potash fertilizer auction. It was learned from the official website of the National Cotton Trading Market that since 2022, there are 15 newly added enterprises qualified for the auction of potash reserves. However, the terminal retail price of compound fertilizers given by the winning bidders in the first round of auctions in 2022 is "cold", in sharp contrast to the high prices of potash contracts. In just a few days, Feicheng can be described as "two layers of ice and fire".
The retail price of the first compound fertilizer terminal is 2330 yuan / ton, and the competition is "fierce"!
On February 18, China's national cotton trading market continued to put the national reserve potassium chloride on the market by bidding at a low price for the terminal retail guide price of ternary compound fertilizer. This is also the first state reserve potash fertilizer auction in 2022. The potash fertilizer sales price and the starting price of the terminal retail maximum guide price in this auction are consistent with the last auction in 2021, which are 3,000 yuan / ton and 2,960 yuan / ton respectively. The only change is that the corresponding production ternary yuan is no longer required. The specification of compound fertilizer is chlorine-based/sulfur-based ternary compound fertilizer with nitrogen, phosphorus and potassium content of 15% each. ) The total effective nutrient content of nitrogen, phosphorus and potassium shall not be less than 45%, and the potassium nutrient content shall not be less than 15%. On the premise of meeting the national standards, the proportion of nitrogen and phosphorus nutrients shall be determined by the bidding enterprises according to the actual market conditions. The auction results are as follows:
It can be seen from the auction results that the terminal retail prices of compound fertilizers given by the winning companies in this round are very low, with the lowest bid of 2,330 yuan / ton, from Genlituo Biotechnology Co., Ltd. The lowest retail price of compound fertilizer given by the winning companies in the last auction in 2021 (December 30) was 2,765 yuan/ton, and some companies won the bid with the highest starting price of 2,960 yuan/ton. In contrast, the first round of auctions this year The competition can be described as "tragic".
A bid has exceeded 600 times, and you have to participate in losing money!
On the day of the auction, the atmosphere in the "Customer Service Group for Depositing Potash Reserves" was also extremely tense. Representatives of companies participating in the auction said: "The bid is too low, and you will lose money if you get it." There are even more than 600 bids for one bid, and some people even doubt it. Is there a problem with the system? Or are there new participating companies who do not understand the bidding rules?
In the evening of the same day, after the announcement of the transaction results, the reporter of "China Agricultural Materials" immediately got in touch with Genlituo Company, which gave the terminal retail price of compound fertilizer 2,330 yuan/ton. When asked if it was an operational error or if the rules were not clear, Huang Kun, the general manager of Genlito Biotechnology Co., Ltd., first broke the reporter's doubts firmly, saying: "I am very clear about the rules of the auction, and there are no mistakes. , that's what we're going to do!"
Immediately, Huang Kun also explained that, frankly speaking, almost no company can make money with these few targets today. As for the reason why Genlituo loses money and participates in this matter, it is mainly for three reasons:
First, in response to the call of the state, the price of chemical fertilizers is currently at a high level, which has led to a significant increase in the planting cost of farmers. Against this background, the state organized storage companies to put reserve potash fertilizers at prices far lower than the market price. For Zhongnong, Sinochem and For a sell-side company like Sinochem, they undoubtedly sacrificed certain corporate interests while demonstrating the social responsibility of state-owned enterprises. Huang Kun said: "The responsibility of ensuring supply and price in the spring ploughing chemical fertilizer market and ensuring national food security cannot be entirely undertaken by state-owned enterprises. Genli, as a leading enterprise in the field of bio-fertilizers and a national leader in weight loss and efficiency enhancement, should also do its best to It can undertake corporate responsibilities as much as possible, play social responsibilities, and do a good job in policy transmission. Just like donations for anti-epidemic and disaster relief, when the country needs us, we must stand up.”
The second is that low-cost fertilizers benefit core end users. Huang Kun said frankly: "In the course of visiting the grassroots this year, I saw that many farmers eventually suffered losses due to the generally bad market conditions. The loss can basically reach 400 to 500 yuan. As a grower, working hard for a year not only does not make money, but even loses so much money. The national policy dividend really benefits the core end users who agree with our green development concept."
The third is to promote farmers to implement the concept of losing weight and increasing efficiency with low-cost fertilizers. Huang Kun said: "Because farmers paid attention to planting costs and superimposed the factors of high prices, farmers were often reluctant to use organic fertilizers. Now relying on the country's dividend policy, rooted As a leading company in the microbial fertilizer industry, Liduo can provide farmers with high-quality, efficient and inexpensive organic fertilizers, so that farmers can afford and use them, and then drive grass-roots farmers to reduce the amount of chemical fertilizers and increase the use of organic fertilizers and microbial inoculants. Dosage to help lose weight and increase efficiency.”
Arouse responsibility and responsibility, and start the first shot to ensure supply and price of fertilizers
Since October 2021, 23 batches of state-stored potash fertilizers have been put in the form of compound fertilizer low-price auctions. The three seller companies, Zhongnong, Sinochem and Sinochem Construction, have released a large amount of potash fertilizer at prices far lower than the market. of potash fertilizers. "China Agricultural Materials" has been paying close attention to the situation of each auction. The trading market has gradually lowered the starting price of the highest guide price for the terminal retail of ternary compound fertilizer from 3150 yuan/ton in the first three rounds to today's 2960 yuan/ton. In the first auction in 2022, some companies took the initiative to offer the price to 2330 yuan / ton. We seem to see the real intention of bidding at the price of compound fertilizer and putting potash fertilizer. The purpose of increasing the supply of low-priced potash fertilizer raw materials in the market is not only to reduce the pressure of enterprises on the production cost side, but more importantly, to arouse the responsibility and responsibility of production enterprises. Today, the production enterprises represented by Genliduo have fired the first shot of ensuring the supply and price of chemical fertilizers. I believe that there will be more and more enterprises like Genliduo who are brave enough to take responsibility in the future. The low price of potash fertilizer is passed to farmers' terminals through compound fertilizers, and the terminal sales price of chemical fertilizers is guided to return to a reasonable range, so as to protect farmers' enthusiasm for planting and improve farmers' willingness to use fertilizers, which is conducive to the healthy and orderly development of the entire fertilizer industry, thereby ensuring national food security.
The retail price of the first compound fertilizer terminal is 2330 yuan / ton, and the competition is "fierce"!
On February 18, China's national cotton trading market continued to put the national reserve potassium chloride on the market by bidding at a low price for the terminal retail guide price of ternary compound fertilizer. This is also the first state reserve potash fertilizer auction in 2022. The potash fertilizer sales price and the starting price of the terminal retail maximum guide price in this auction are consistent with the last auction in 2021, which are 3,000 yuan / ton and 2,960 yuan / ton respectively. The only change is that the corresponding production ternary yuan is no longer required. The specification of compound fertilizer is chlorine-based/sulfur-based ternary compound fertilizer with nitrogen, phosphorus and potassium content of 15% each. ) The total effective nutrient content of nitrogen, phosphorus and potassium shall not be less than 45%, and the potassium nutrient content shall not be less than 15%. On the premise of meeting the national standards, the proportion of nitrogen and phosphorus nutrients shall be determined by the bidding enterprises according to the actual market conditions. The auction results are as follows:
It can be seen from the auction results that the terminal retail prices of compound fertilizers given by the winning companies in this round are very low, with the lowest bid of 2,330 yuan / ton, from Genlituo Biotechnology Co., Ltd. The lowest retail price of compound fertilizer given by the winning companies in the last auction in 2021 (December 30) was 2,765 yuan/ton, and some companies won the bid with the highest starting price of 2,960 yuan/ton. In contrast, the first round of auctions this year The competition can be described as "tragic".
A bid has exceeded 600 times, and you have to participate in losing money!
On the day of the auction, the atmosphere in the "Customer Service Group for Depositing Potash Reserves" was also extremely tense. Representatives of companies participating in the auction said: "The bid is too low, and you will lose money if you get it." There are even more than 600 bids for one bid, and some people even doubt it. Is there a problem with the system? Or are there new participating companies who do not understand the bidding rules?
In the evening of the same day, after the announcement of the transaction results, the reporter of "China Agricultural Materials" immediately got in touch with Genlituo Company, which gave the terminal retail price of compound fertilizer 2,330 yuan/ton. When asked if it was an operational error or if the rules were not clear, Huang Kun, the general manager of Genlito Biotechnology Co., Ltd., first broke the reporter's doubts firmly, saying: "I am very clear about the rules of the auction, and there are no mistakes. , that's what we're going to do!"
Immediately, Huang Kun also explained that, frankly speaking, almost no company can make money with these few targets today. As for the reason why Genlituo loses money and participates in this matter, it is mainly for three reasons:
First, in response to the call of the state, the price of chemical fertilizers is currently at a high level, which has led to a significant increase in the planting cost of farmers. Against this background, the state organized storage companies to put reserve potash fertilizers at prices far lower than the market price. For Zhongnong, Sinochem and For a sell-side company like Sinochem, they undoubtedly sacrificed certain corporate interests while demonstrating the social responsibility of state-owned enterprises. Huang Kun said: "The responsibility of ensuring supply and price in the spring ploughing chemical fertilizer market and ensuring national food security cannot be entirely undertaken by state-owned enterprises. Genli, as a leading enterprise in the field of bio-fertilizers and a national leader in weight loss and efficiency enhancement, should also do its best to It can undertake corporate responsibilities as much as possible, play social responsibilities, and do a good job in policy transmission. Just like donations for anti-epidemic and disaster relief, when the country needs us, we must stand up.”
The second is that low-cost fertilizers benefit core end users. Huang Kun said frankly: "In the course of visiting the grassroots this year, I saw that many farmers eventually suffered losses due to the generally bad market conditions. The loss can basically reach 400 to 500 yuan. As a grower, working hard for a year not only does not make money, but even loses so much money. The national policy dividend really benefits the core end users who agree with our green development concept."
The third is to promote farmers to implement the concept of losing weight and increasing efficiency with low-cost fertilizers. Huang Kun said: "Because farmers paid attention to planting costs and superimposed the factors of high prices, farmers were often reluctant to use organic fertilizers. Now relying on the country's dividend policy, rooted As a leading company in the microbial fertilizer industry, Liduo can provide farmers with high-quality, efficient and inexpensive organic fertilizers, so that farmers can afford and use them, and then drive grass-roots farmers to reduce the amount of chemical fertilizers and increase the use of organic fertilizers and microbial inoculants. Dosage to help lose weight and increase efficiency.”
Arouse responsibility and responsibility, and start the first shot to ensure supply and price of fertilizers
Since October 2021, 23 batches of state-stored potash fertilizers have been put in the form of compound fertilizer low-price auctions. The three seller companies, Zhongnong, Sinochem and Sinochem Construction, have released a large amount of potash fertilizer at prices far lower than the market. of potash fertilizers. "China Agricultural Materials" has been paying close attention to the situation of each auction. The trading market has gradually lowered the starting price of the highest guide price for the terminal retail of ternary compound fertilizer from 3150 yuan/ton in the first three rounds to today's 2960 yuan/ton. In the first auction in 2022, some companies took the initiative to offer the price to 2330 yuan / ton. We seem to see the real intention of bidding at the price of compound fertilizer and putting potash fertilizer. The purpose of increasing the supply of low-priced potash fertilizer raw materials in the market is not only to reduce the pressure of enterprises on the production cost side, but more importantly, to arouse the responsibility and responsibility of production enterprises. Today, the production enterprises represented by Genliduo have fired the first shot of ensuring the supply and price of chemical fertilizers. I believe that there will be more and more enterprises like Genliduo who are brave enough to take responsibility in the future. The low price of potash fertilizer is passed to farmers' terminals through compound fertilizers, and the terminal sales price of chemical fertilizers is guided to return to a reasonable range, so as to protect farmers' enthusiasm for planting and improve farmers' willingness to use fertilizers, which is conducive to the healthy and orderly development of the entire fertilizer industry, thereby ensuring national food security.
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June 12, 2024, 9:21 AM
June 12, 2024, 9:21 AM