China to Raise the cost Fertilizer Export Tax by 100%

China, the world's largest grain producer, will increase export duties on all fertilizers and some related raw materials by 100 percentage points to ensure domestic supply for farmers during the main growing season. The changes will be effective from April 20 to Sept. 30 and will increase export taxes on fertilizer products to between 100 percent and 135 percent.

China, grappling with soaring food costs, has boosted subsidies and grain prices to stem declining interest in farming. Lower exports from China, a major supplier of some products such as urea and ammonium phosphate, may further stoke global prices of fertilizers, with some trading at records on demand for food and biofuels. The government is sacrificing the fertilizer industry to protect farming, as grain production is critical to China's struggle with inflation, Xu Hongzhi, a Beijing-based fertilizer analyst at Beijing Orient Agribusiness Consultant Ltd.,

If China effectively restricts exporting fertilizers, it could be fatal to global supplies of some products, such as ammonium phosphate, as it supplies between 20 to 30 percent of global trade volume of the plant feed.