April 18, 2008

China raises tariffs to curb fertilizer exports, secure local grain production

China announced on Thursday increased tariffs on fertilizer exports to control the rapid hikes of grain production costs.

Beijing's 100 percent-plus tariffs on fertilizer exports are seen to temper domestic costs and drive up prices in world markets.

China is currently aiming to grow the most corn and wheat for its local consumers.

Fears of higher costs of fertilizer, diesel and labour might discourage farmers from planting grains, thereby raising feed costs for meat producers and driving inflation further.

China is in the peak season for fertilizer demand, since spring planting has been under way since March.

Yet, strong international fertilizer prices have driven exports to surge, the Ministry of Finance said on Thursday.

The tariffs on fertilizer exports will range from 100 percent to 135 percent, effective from April 20 to Septermber 30.

The tariff was hiked to ensure smooth spring planting and set a solid foundation for the annual grain harvest, the ministry said.