Why do compound fertilizer manufacturers feel that they are not busy during the peak season? The author believes there are four main reasons:
The first is the impact of the overall fertilizer market. Since August, with the decrease in demand, there has been a noticeable decline in the fertilizer market, with urea and other varieties falling by more than 200 yuan. In the case of a drop in the price of the entire fertilizer market, it is very difficult for compound fertilizers to “stand aloneâ€. Because compound fertilizers and other single-element fertilizers have a problem of mutual substitution, if prices of other fertilizers fall and compound fertilizer prices increase, farmers will use single-element fertilizers instead of compound fertilizers, forcing compound fertilizer producers to lower prices to keep market share.
The second is the excessive increase in production capacity. Originally, due to the relatively good market conditions for compound fertilizer in the second half of last year and the country’s price limit on urea prices, many dealers did not dare to store urea in winter and changed to a large amount of winter storage compound fertilizer during last year's winter storage period, thus making the amount of compound fertilizer available this year. obviously increase. At the same time, there have been many new production facilities for compound fertilizer companies put into operation this year, resulting in further increase in the supply of compound fertilizers. At present, the market supply of compound fertilizer is very sufficient. Many manufacturers and distributors have a considerable amount of products in their hands, which also makes it difficult for compound fertilizer prices to rise.
Third, the production costs of enterprises have been reduced. Since May of this year, the prices of raw materials for compound fertilizers have dropped significantly. For example, the highest price of monoammonium phosphate reached 2200 yuan this year, the current price is about 1800 yuan; urea this year, the highest wanghaiqing price reached 2,000 yuan, the current price is about 1720 yuan. The decline in raw material prices has reduced the cost of compound fertilizer production enterprises. In the case of a poor market condition, some manufacturers have started to lower their prices, which has led to a decline in the overall market.
Fourth, the demand situation is not optimistic. Since the beginning of this year, the prices of chemical fertilizers and other agricultural products have continued to rise on the basis of last year's rising prices. The prices of many agricultural products not only have not risen in synchrony, but have also dropped. This has led to a significantly lower return on farmers' farming this year than last year. This situation has had a negative impact on farmers' farming enthusiasm, which has led to a reduction in the use of compound fertilizers during the fall and winter seasons this year.
The first is the impact of the overall fertilizer market. Since August, with the decrease in demand, there has been a noticeable decline in the fertilizer market, with urea and other varieties falling by more than 200 yuan. In the case of a drop in the price of the entire fertilizer market, it is very difficult for compound fertilizers to “stand aloneâ€. Because compound fertilizers and other single-element fertilizers have a problem of mutual substitution, if prices of other fertilizers fall and compound fertilizer prices increase, farmers will use single-element fertilizers instead of compound fertilizers, forcing compound fertilizer producers to lower prices to keep market share.
The second is the excessive increase in production capacity. Originally, due to the relatively good market conditions for compound fertilizer in the second half of last year and the country’s price limit on urea prices, many dealers did not dare to store urea in winter and changed to a large amount of winter storage compound fertilizer during last year's winter storage period, thus making the amount of compound fertilizer available this year. obviously increase. At the same time, there have been many new production facilities for compound fertilizer companies put into operation this year, resulting in further increase in the supply of compound fertilizers. At present, the market supply of compound fertilizer is very sufficient. Many manufacturers and distributors have a considerable amount of products in their hands, which also makes it difficult for compound fertilizer prices to rise.
Third, the production costs of enterprises have been reduced. Since May of this year, the prices of raw materials for compound fertilizers have dropped significantly. For example, the highest price of monoammonium phosphate reached 2200 yuan this year, the current price is about 1800 yuan; urea this year, the highest wanghaiqing price reached 2,000 yuan, the current price is about 1720 yuan. The decline in raw material prices has reduced the cost of compound fertilizer production enterprises. In the case of a poor market condition, some manufacturers have started to lower their prices, which has led to a decline in the overall market.
Fourth, the demand situation is not optimistic. Since the beginning of this year, the prices of chemical fertilizers and other agricultural products have continued to rise on the basis of last year's rising prices. The prices of many agricultural products not only have not risen in synchrony, but have also dropped. This has led to a significantly lower return on farmers' farming this year than last year. This situation has had a negative impact on farmers' farming enthusiasm, which has led to a reduction in the use of compound fertilizers during the fall and winter seasons this year.
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