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China removes government control over fertilizer price

(Xinhua)
Updated: 2009-01-24 15:18

BEIJING - China will remove government control over fertilizer prices starting from Sunday, the country's economic planner said Saturday.

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Prices of domestically produced fertilizers and all fertilizer imports except potash fertilizers will be decided by the market, said the National Development and Reform Commission (NDRC).

Previously, China asked fertilizer producers and retailers to get approval for price increases and exercised controls on the extent of price increases in 2004, in order to stablize soaring prices at that time to protect farmers.

Saturday's move came as the country's fertilizer prices experienced slumps in the second half of last year and producers are suffering from low prices and insufficient demand from farmers before the spring ploughing season.

The new pricing mechanism was aimed at "enabling the market to play a decisive role in allocating resources", "promote a sustained and healthy development of the fertilizer sector", and "protect the interests of farmers", the NDRC said in a statement posted on its website.

An unidentified NDRC official said prices were unlikely to rise after the new pricing mechanism kicked in, as China's market supply and demand of fertilizers are generally balanced.

Some products, such as nitrogenous fertilizers and phosphate fertilizers, are oversupplied and there are amply supplies of different kinds of fertilizers, the official added.