With the arrival of spring farming season, fertilizer prices in China have surged significantly compared to the same period in 2007. Urea prices have risen by an average of 10% to 15%, ammonium bicarbonate by about 30%, ammonium chloride by over 50%, and ammonium sulfate has jumped by as much as 100% due to rising sulfur costs. Phosphate fertilizers have also seen sharp increases, with DAP climbing 100% and monoammonium phosphate up by around 90%. Due to high export demand, some products are out of stock, companies have stopped quoting prices, and certain regions lack market value. Overall, this year is shaping up to be the most expensive and supply-constrained for fertilizers in recent years. Despite a growing number of rural young and middle-aged workers leaving for urban areas and a declining cultivated land area, domestic fertilizer supply remains tight. Industry experts attribute this to three main factors. First, rising raw material costs have pushed production expenses higher, leading to continuous price hikes. Global energy shortages have caused raw material prices to spike. In March, coal prices in Shandong and Hebei reached or exceeded 1,000 yuan per ton. At a recent Natural Gas Coordination Conference, 30 fertilizer companies reported increased gas and raw material costs due to supply shortages. Additionally, sulfur prices, a key component in compound fertilizers, have surged from around $54 per ton last year to $720–750 per ton today. This has added over 2,000 yuan per ton to the production cost of diammonium phosphate alone. In early April, fertilizer manufacturers across the country announced new price increases. In Guizhou, high-grade compound fertilizer prices rose by 1,000–1,500 yuan per ton compared to last year, while low-grade varieties increased by 400–600 yuan per ton. Meanwhile, wholesale prices were even lower than factory delivery prices in some cases, creating a negative spread of more than 100 yuan per ton. Second, high international fertilizer prices and strong export demand have further driven up domestic prices. For example, in 2007, China exported 5.25 million tons of urea—an increase of 284.27% compared to 2006. The average selling price rose to 281.63 USD per ton, up 17.88% from 238.91 USD per ton in 2006. Third, severe winter storms in southern China disrupted power and coal supplies, causing widespread fertilizer shortages during the critical spring plowing season. China’s annual DAP demand for spring is approximately 2.4 million tons, but large exports last year and production disruptions due to the ice disaster have left supply tight. With only 20% of previous year's reserves in most regions, the situation is particularly acute in the northeastern part of the country, where fertilizers rely heavily on external supplies. This year’s potash import negotiations remain unresolved, and merchants are holding onto stocks rather than releasing them, further tightening the supply. The rising cost of sulfur has also caused potassium sulfate prices to soar, with quotes now exceeding 4,000 yuan per ton. While compound fertilizer prices may remain high in the first half of the year due to global supply constraints, urea prices could see a slight decline as transportation improves, the fertilizer season shifts, and resources are reallocated. According to recent reports, the government may raise the urea export tariff in May, which could help curb the price surge.

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