The Chinese government dropped all export duties on nitrogen and phosphate fertilizers, effective Jan. 1, 2017. The move was long expected by the international trading community.
Exported urea last year faced a duty of RMB80/mt (US$11.50/mt) while DAP and MAP had an RMB100/mt (US$14.37/mt). A 5 percent duty imposed on TSP and SSP exports in 2016 was also dropped.
Tariffs on NPK fertilizer is being dropped from 30 percent to 20 percent of the portside price. The duty on potash exports remains at RMB600/mt (US$86.20). Potassium nitrate duty also remains at the 2016 level of 5 percent.
The removal of the urea duty was seen by industry sources as an effort by the Chinese government to make sure Chinese urea remains competitive against other global players, especially Iran. At the same time, however, the reduced output by Chinese urea producers – just under 50 percent of rated capacity – has tightened the urea market enough to prop up prices. One trader questioned the logic behind making more Chinese product available for the global market at a time when domestic demand is up and production is down.