Potash negotiations have settled where we win?

Recently, after five months of marathon negotiations, the China Potash Joint Negotiating Team finally reached an agreement with the international potash fertilizer giant on the 2015 potash import contract at a price of CFR315/ton, which is $10/ton higher than last year's contract price. Other terms are not. change. Potash negotiations, which have been widely concerned, have settled.

The media reported the results of the potash negotiations with the “lowest price in the world”. Industry insiders believe that the potash negotiations will once again “win in China”. Indeed, in recent years, China's potash fertilizer contract price has been the lowest price in the world. China has already grasped the initiative in international potash fertilizer price negotiations. After the annual price of potash fertilizer is determined, China's import price will become the international potash fertilizer import benchmark price. Other countries and regions are using this as a reference, and have risen in different ranges.

Why can Chinese potash fertilizer prices become the world's down-to-earth grounds? Where does the potash fertilizer debate stand? Where does potash fertilizer negotiation win?

First, the Chinese market has attracted world attention. China is one of the world's largest importers of potash fertilizers. Since 2011, imports have exceeded 6 million tons each year. In 2011, it was 6,401,900 tons, in 2012, 6,421,100 tons, and in 2013, 6,290,700 tons, and more in 2014. It was as high as 8,301,200 tons, a substantial increase of 33.19% year-on-year. The huge “potash cake” is optimistic for foreign investors, especially under the predicament of international potash supply exceeding demand, the Chinese market has become the key to foreign investors.

Second, China's potash fertilizer development strategy has achieved fruitful results. To get rid of the long-term predicament of potassium resources, the Chinese government formulated three “one-third” strategies for the development of potash fertilizer in previous years: One-third of domestic production, one-third of foreign imports, and one-third of “going” Go out to set up factories abroad. The steady advancement of this strategy will not only allow the Chinese potash industry to gain more initiative, but also quietly change the world potash pattern.

In recent years, the production of potash fertilizer in China has developed rapidly, and the self-supply rate of potash fertilizer has increased significantly. With the increase of domestic potassium production capacity, the proportion of imported potassium dropped from 70% of the peak to about 50%, and the dependence on imported potash fertilizer decreased, which also increased our discourse power in the potash fertilizer import negotiations. The "going out" strategy of potash fertilizer in China is also landing. By the end of last year, China had operated 28 potash fertilizer projects in 10 countries. Some projects were under construction and tendering and some projects had already been put into production.

Third, the negotiations on potash showed "Chinese characteristics." The Chinese Potash Fertilizer Negotiations have established a joint negotiation mechanism. Government-led, association-coordination, and enterprise participation have united and formed a strong joint force in the negotiations. At present, the members of the Chinese Joint Negotiating Group are mainly composed of central enterprises such as Sinochem Group, China Agriculture Group, and China Shipping Chemical. The experts participating in the negotiations stated that China is the largest importer of iron ore, but our price is also the highest, and we have almost no right to speak. In terms of potash imports, we have a fist from top to bottom in order to effectively release our power.

From passive to active, the “Chinese power” in the potash negotiations is gradually emerging. From the predicament to the good times, the Chinese potash fertilizer industry is using wisdom and efforts to achieve self-development and change the world pattern.