The urea price continues to fluctuate, and the industry association calls for "avoiding speculation following the trend"

Compound Fertilizer, Monoammonium Phosphate, Nitrogen Fertilizer, Phosphate Fertilizer, Potassium Chloride, Potassium Fertilizer, Potassium Sulfate

The abnormal fluctuations in urea market prices have attracted widespread attention. On September 3rd, the China Agricultural Materials Circulation Association issued a call, stating that the urea market has recently deviated from supply and demand fundamentals. Industry enterprises should operate rationally, prevent risks, consciously resist speculative behavior, avoid following the trend and hype, jointly maintain a good market environment, and promote healthy and sustainable development of the industry.



Or influenced by hot money speculation



Recently, there has been irrational speculation in the domestic urea futures market, which has had a negative impact on the smooth operation of the domestic fertilizer market. Since June, the domestic urea futures prices have risen rapidly, with the average settlement price of the main contracts rising from the lowest point of 1649 yuan/ton on June 12 to 2356 yuan/ton on September 1, driving the urea spot market to rise to varying degrees. According to the monitoring data of the China Fertilizer Price Index of the China Agricultural Materials Circulation Association, the national average wholesale price of urea on August 28th was 2547.18 yuan/ton, an increase of 5.47% month on month from July 31st.



Regarding the recent sustained increase in urea prices, the China Agricultural Materials Circulation Association quoted industry insiders as analyzing that some hot money has entered the urea futures market for speculation and speculation, interfering with the normal functioning of the price mechanism and stirring up the spot market, which may affect the supply of autumn and winter fertilizers and the implementation of the national fertilizer commercial reserves in the upcoming new year. Relevant national departments will take a series of regulatory measures to guide and stabilize the fertilizer market.



On September 2nd, Zhongnong Group, a large backbone enterprise under the All China Federation of Supply and Marketing Cooperatives and a controlling subsidiary of China Agricultural Production Means Group Co., Ltd., issued a supply guarantee proposal, stating that the current period is an important period for the conversion of domestic urea during the low and peak seasons and winter reserves. Recently, domestic urea prices have experienced a rise in the low season and futures prices have fluctuated. Remind all partners to beware of business risks and approach the market rationally.



At the same time, Zhongnong Group has issued an initiative to its domestic partners: rational organization of purchasing and sales, avoidance of "following the trend procurement", active marketing, opposition to hoarding and speculation, conscious resistance to speculative behavior, joint maintenance of a good market environment, promotion of healthy and sustainable development of the industry, and making positive contributions to ensuring food security.



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The China Agricultural Materials Circulation Association solemnly calls on industry enterprises to enhance their political standing, fully recognize the importance of ensuring the supply of fertilizers, fulfill their social responsibilities, actively organize fertilizer production, market purchase and sales, and service work, fully provide domestic supply of fertilizers and other agricultural materials, effectively maintain price stability, and make positive contributions to ensuring food security.



According to the analysis of Guoxin Futures, due to the reduction of supply, unexpected exports, and the concentrated production and raw material replenishment of composite fertilizer enterprises, they jointly supported the demand during the off-season period. In late August, the inventory of urea enterprises continued to remain low. Urea enterprises have sufficient confidence in price support, and the urea market has shown strong performance, resulting in a phenomenon of "not weak in the off-season".



The appeal of the association can remind industry enterprises to operate rationally and prevent speculative behavior, "Yuan Shuai, Executive Vice President of the Agricultural, Cultural and Tourism Industry Revitalization Research Institute, told Securities Daily. However, the formation of prices is influenced by multiple factors, and relying solely on the association's voice may not be able to completely curb price imbalances. It also requires the joint efforts of the government and all parties in the industry