China’s Sinofert Holdings Ltd., CNAMPGC, and Qinghai Salt Lake Industry Co. Ltd. (QSL) have been fined by the country’s State Administration for Market Regulation (SAMR) for “price gouging” on sales of potash, according to a Bloomberg report, citing statements from SAMR.
SAMR fined Sinofert Holdings and CNAMPGC each 2.6 million yuan (approximately $402,000 at current exchange rates), and QSL was fined 1.6 million yuan “for their behaviors in potassium chloride transactions this year” that violated China’s Price Law.
Domestic prices of potash increased more than 60 percent in the first half of this year. Domestic prices of NPK fertilizers have also increased sharply in recent months.
State-owned QSL is China’s largest potash producer. It has a production capacity of about 5 million mt/y, accounting for just over 40 percent of China’s estimated 12 million mt/y potash production capacity, according to Green Markets data (GM Jan. 3, 2020).
Sinofert is the country’s largest fertilizer supplier and distributor, selling about 2.1 million mt of potassium chloride last year, according to the report. CNAMPGC is also a leading importer, exporter, and distributor of fertilizers in China.
Late last week, China’s state planner, the National Development and Reform Commission (NDRC), called for a full court press to guarantee fertilizer supplies, issuing detailed orders to regulators like SAMR, as well as government departments and producers, according to the report. NDRC warned against fertilizer hoarding and price manipulation (GM Sept. 24, p. 16).
The state planner said the government would take measures to keep fertilizer supplies and prices stable, and it called for potash reserves to be released into the market to ease prices.
China’s national potash reserves in recent years have typically been maintained at the 1.5 million mt level. The country’s potash inventory at the ports was recently estimated at 2.045 million mt, according to a China Fertilizer Week report (GM Sept. 17, p. 15).