On April 17, the Ministry of Finance announced that, following approval from the State Council, the Customs Tariff Commission has decided to impose a 100% special export tariff on all chemical fertilizers and certain types of fertilizers exported during the domestic fertilizer season, which runs from April 20 to September 30 this year. This applies to all trade forms, regions, and enterprises. The existing export tax rate will be increased by 100%, raising China’s overall fertilizer export tax rate from 100% to 135%. This policy has caused concern within the fertilizer industry, with many fearing that the export market is now completely closed off, leading to a bleak outlook for fertilizer companies. However, some industry insiders see this as an opportunity—specifically, the chance to establish production facilities abroad. In recent years, rising international energy prices have significantly increased production costs, while higher grain prices and growing global demand have driven up fertilizer prices. As a result, China's fertilizer exports have surged. In the first two months of this year alone, urea exports reached 1.71 million tons—an increase of 250% compared to the same period last year. Monoammonium phosphate and diammonium phosphate exports also rose sharply, by 280% and 130%, respectively. The government has imposed strict export controls to ensure domestic supply and manage energy use, as fertilizers are high-energy products. The new 100% special export tariff represents a major blow to exporters, effectively closing any remaining loopholes. It’s clear that the government does not want fertilizers to be exported during peak seasons. Companies must understand and support this national interest. At the same time, it’s important to recognize the strong position Chinese fertilizers hold in the global market. With a wide customer base, strong competitiveness, and a solid reputation, losing access to international markets would be a significant loss. Industry experts recommend that companies consider building factories overseas, utilizing local resources like natural gas, coal, and phospho-potash for production, and then selling into large foreign markets. This approach could generate substantial profits from both production and sales, reduce China’s energy consumption, and help capture more of the global market. Moreover, this strategy is highly feasible. China is the world’s largest producer of chemical fertilizers, with advanced technologies for producing nitrogen, phosphorus, potassium, and compound fertilizers. Many companies already have the capability to set up overseas operations. In recent years, some Chinese fertilizer companies have taken the initiative to go abroad, establishing factories through sole proprietorships, joint ventures, or partnerships. However, these efforts remain small-scale and slow-moving. The current high export tariffs provide an incentive for foreign investment, and forward-thinking companies should take advantage of this opportunity to expand their operations internationally and lead a new wave of overseas expansion.

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