Jan. 24, 2008 (China Knowledge) - The National Development and Reform
Commission
(NDRC), China's top economic planner, has announced yesterday at a warning
conference on price control of fertilizer, that it will extend a price
control
policy to fertilizer, a move to protect farmers' welfare and China's food
security.
According to the NDRC senior official who made the announcement, fertilizer
makers run by the central government should not raise the ex-factory prices
of
urea while fertilizer manufacturers run by local governments should
strictly
control their ex-factory prices of urea, phosphate fertilizer as well as
compound fertilizer. Private companies are required to seek official
approval
when they intend to raise prices.
The interim price intervention covers the spring plowing period.
Prior to this decision to extend price intervention to fertilizer, it was
predicted to have continuous price rises.
Statistics show the ex-factory prices of urea and compound fertilizer have
risen
to RMB 1,725 (US$238.6) per ton and RMB 2,600 (US$359.6) per ton,
respectively,
both up more than 30% year-on-year.
Analysts attributed these price rises to international price interaction,
cost
increase and China's lack of phosphorus and potassium resources.
Fertilizer is one of the most important means of production for farming, so
farmers may suffer from the rising costs especially since the plowing
season is
coming.
The government thus faces a dilemma of having to curb the agricultural
product
prices to tackle inflation on the one hand, and maintain the farmers'
enthusiasm
on
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