Agri-Shop Ltd
Farminguk
23 July 2016 | Online since 2003
Briefing Media - FG Classified


19 November 2012 14:54:39|Finance,News,Slurry and Irrigation

China's urea industry 'at a turning point'


China’s urea producers are faced with a choice – stay domestic or go global, according to an industry note released today.

The research found that China is expected to remain the world’s largest urea producer and a major exporter in the medium-term, with producers and traders expected to continue exporting two to four million tonnes of urea annually.

Urea is a nitrogen-based fertiliser and is considered a necessary input for agricultural production. Nitrogen is a macro-nutrient which farming enterprises apply to soils and plants to increase productivity. Urea accounts for around two-thirds of nitrogen fertiliser applications globally.

Rabobank Director Food & Agribusiness Research and Advisory, Adam Tomlinson, commented, “At the same time, China’s urea industry is facing ongoing challenges of export competiveness and the ability to execute global expansion plans.”

Rabobank’s research found that market forces are shifting the structures of China’s urea industry from both a cost and consolidation perspective.

Mr Tomlinson continued, “Competitive cost pressures in the domestic and international urea markets have encouraged major urea producers to revise their business models. They are adapting their production infrastructure, product portfolios and sales distribution channels to capture significant market share and participate in urea exports on an opportunistic basis.

“At the same time, new urea production capacity has shifted upcountry to counties/ provinces more closely aligned with raw feedstocks. China’s urea industry is also consolidating, resulting in the formation of an increasing number of domestic producers generating world-leading product volumes.”

Rabobank recommended that major urea producers need to decide whether to invest locally for domestic growth or invest abroad to strengthen their participation in global markets.

Mr Tomlinson concluded, “China’s urea producers that stay domestic will need to focus on urea consumption in line with domestic crop productivity. As demand for agriculture products continues to rise and the farming sector continues to modernise, the fertiliser industry (including urea) in China will play an important role in achieving sustainable self-sufficiency in agricultural production.”

“On the other hand, a key future strategy for urea producers in China that have bold global market ambitions is the ability to invest in overseas production assets to achieve year-round trading options to better service their international trading partners.

“If China urea producers do expand internationally, this will have major implications for suppliers in other markets, given China is already the largest urea producer by a significant margin,” he said.

Download

0 Comment

loginuserlogo
Name

Please enter your name


Email

Comment

Please enter your comment


Post Comment

Your comment submitted successfully.Please wait for admin approval.


Comments

No comments posted yet. Be the first to post a comment


Australia | 22 July 2016
Laws surrounding foreign investment in farmland 'too restrictive'

A government-commissioned report into the regulatory burden imposed on Australian farmers has advised the federal government to lift "red tape" surrounding foreign investment in local agriculture, as ...


Germany | 22 July 2016
Bakery venture feeds German appetite for pesticide-free food

There's a booming demand in Germany for produce that is both locally sourced and free from chemicals. One cooperative in Karlsruhe is linking farmers producing pesticide-free grains with artisanal bak...


Australia | 22 July 2016
Australia's richest woman buys two cattle stations

Gina Rinehart's Hancock Prospecting has snapped up two cattle stations in the Northern Territory, adding to the billionaire's steadily expanding livestock portfolio. Hancock has acquired the Rivere...


Cambodia | 22 July 2016
You could own a piece of a Cambodian dairy startup

At a time when Nintendo’s Pokémon Go is taking over the world, the name Moo Moo Farms may conjure up imagery of pixelated princesses and plumbers whizzing along a cartoon racetrack. But it turns ou...


USA | 22 July 2016
Is it too late to invest in farmland?

Last week, I wrote an article called The Bull Thesis on Farmland in which I presented the asset class and explained why I believe it to be a good idea to add some farmland to your portfolio. I was...



Trending Now

Viewed
Discussed


Top stories you may have missed
closeicon
Username
Password