In a dramatic move, the Chinese government announced that it would not impose any special duties on exported fertilizers in 2019. International traders said the action could make all grades of fertilizer more attractive.
Last year MOP and SOP were hit with a flat-rate export duty of RMB600 (US$87/mt). Other potassium-based fertilizers were subject to a 30 percent duty before being loaded on a vessel.
Phosphate fertilizers, including DAP, were charged a 5 percent duty on export last year. Phosphate rock was hit with a 10 percent duty. The elimination of the export duties is expected to make more DAP and phos rock available to the global markets.
The big winner may be the NPK producers, said one international trader. The 2018 rate for NPK exports was a flat rate of RMB100/mt (US$14.54/mt). Without this added cost, more international buyers might shift their NPK buying demand from Vietnam, the Philippines, or Thailand to China.
The duty on imported fertilizers will remain at 1 percent of the landed value. The government did lower the value-added-tax on ammonia and sulfur to 16 percent, making it easier for DAP producers to get access to these important components for production. Other imported fertilizers will be hit with a 10 percent VAT, in addition to the import duty.
Ammonia and phos rock can be imported duty free and subject to only the VAT.