Should the fertilizer export tariff be abolished? Industry experts and scholars suggest abolishing it
Recently, at the analysis meeting on the economic operation situation for the first three quarters organized by the China Petroleum and Chemical Industry Federation, attending experts and scholars expressed their views on the fertilizer tariff issue one after another. Wang Ying, deputy director of the Information Department of the China Phosphate Fertilizer Industry Association, said: "Previously the fertilizer industry enjoyed various preferential policies, so the state imposed relevant tax and fee restrictions on fertilizer product exports to balance the industry's development. As various preferential policies have been successively abolished and the value-added tax has been reintroduced, the production costs of fertilizer enterprises have increased substantially, so it is necessary to abolish the fertilizer export tariff and promote the healthy development of the fertilizer industry."
Su Jianying, director of the Industry Department of the China Nitrogen Fertilizer Industry Association, also suggested abolishing the urea export tariff. In recent years, under the influence of multiple factors such as the abolition of railway freight rate preferences, the increase in natural gas prices, the market-oriented reform of electricity prices, and the resumption of value-added tax collection, fertilizer costs have risen sharply. In the first three quarters, the domestic fertilizer market could hardly be described as improving; although export volume increased, export prices kept falling.
Quick comment: It is an indisputable fact that China's fertilizer industry has serious overcapacity. The state's gradual abolition of preferential policies for domestic fertilizer enterprises and the reintroduction of the fertilizer value-added tax are aimed precisely at solving this problem. Moreover, global nitrogen and phosphate fertilizer capacity is also continuing to expand, leaving less and less room for China's fertilizer exports. The urgent task for China's fertilizer industry should be to accelerate transformation and upgrading, eliminate outdated capacity, and enhance the technological content of products, rather than pinning hopes on abolishing the export tariff, a "stopgap measure."