Yunnan Province has recently introduced a series of policies aimed at restructuring the low-concentration phosphate fertilizer industry. Starting from January this year, enterprises producing calcium superphosphate in Yunnan can no longer rely on localized supply and preferential pricing for phosphorus ores. Additionally, from March 1st, companies with an annual production capacity of 100,000 tons or less will generally not be allocated railway transportation plans. By the end of 2010, facilities with an annual output below 200,000 tons are expected to be phased out. This policy was first reported by local media on February 4th.
The announcement has sparked widespread concern among chemical companies in Yunnan. Many fear that these measures could severely impact the entire low-concentration phosphate fertilizer sector. Industry experts argue that due to China's large population and the relatively low income of many farmers, there remains significant demand for low-concentration products. Critics believe that a one-size-fits-all approach is inappropriate and may hinder agricultural development.
At Yunnan Anning Xingya Phosphorus Chemical Co., Ltd., the sales director expressed frustration over limited railway transport, which has forced the company to shift its focus to the local market. Meanwhile, Li Yawei, general manager of Kunming Haikou and Weiwei Co., Ltd., said that the company had to halt operations temporarily due to insufficient supply and rising raw material costs, leaving workers on extended holidays. He hinted that the company might pivot to other product lines in the near future.
According to data from 2007, Yunnan had 105 superphosphate enterprises, with only five exceeding 200,000 tons annually. This means the new regulations target the majority of smaller producers. Tao Shiqiu, chairman of Yunnan Jinxing Chemical Co., Ltd., warned that the policy could deal a fatal blow to the low-concentration phosphate fertilizer industry in the region. He emphasized that while high-concentration fertilizers dominate 60% of the market, low-concentration products remain essential for many farmers.
Tao called for a more balanced approach, arguing that the government should support strong companies rather than eliminate smaller ones. He pointed out that low-concentration fertilizers like superphosphate contain essential nutrients such as sulfur, calcium, and magnesium—elements that many synthetic fertilizers lack. These products also offer cost advantages, making them crucial for rural communities.
Experts have echoed similar concerns, suggesting that the push toward high-concentration fertilizers may not be entirely justified. They argue that diverse fertilizer options are necessary to meet different soil and crop needs. In contrast, provinces like Gansu have adopted policies to promote the development of the superphosphate industry.
Representatives from the Yunnan Chemical Industry Association stated that resource and environmental considerations make structural adjustments inevitable. Companies are encouraged to align their production with sustainability goals, invest in technological upgrades, and explore partnerships or foreign investments. Some firms are already taking steps in this direction.
For example, Zhao Fu, chairman of Yunnan Xinzhengda Phosphorous Chemical Co., Ltd., said the company is investing in higher-value products such as calcium phosphate and expanding into international markets. New exports are expected to begin in March, signaling a strategic shift in response to the regulatory changes.
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