China to double export duties on fertilizers

[Driven1]

CHINA will temporarily double export duties on fertilizers and related raw materials to guarantee domestic supply for farmers, according to a statement filed by the Ministry of Finance today.

The new rule will take effect between April 20 and September 30, the prime season of growing grain and other staple foods.

"Since March, China has entered the peak fertilizer season. With increasing energy and food prices on the global market, the price gap between domestic and overseas markets is widening and export growth of fertilizers is expanding quickly," said the statement.

"To ease the pressure of price rises on the home market due to faster export growth and ensure domestic supply, the Office of Customs Tariff Commission of the State Council decided to increase the export duties on fertilizers and related products by 100 percentage points."

In the first two months, China's export of urea rose 250 percent to 1.71 million tons and some overseas shipments of phosphate fertilizers more than tripled.

China has been fighting against increasing inflation pressure since the second half of last year.

The consumer prices, the main gauge of inflation, expanded eight percent in the first quarter this year. It reached a near 12-year high of 8.7 percent in February and eased a bit to 8.3 percent in March.

The main driver of this round of price rises went to surging food costs, spreading from pork to edible oil, vegetables and other items.

In the first quarter, food costs still climbed 21 percent year on year, contributing 6.8 percentage points to the overall CPI jump.

The new tax rule is crucial to slow export growth in a key component of food production, industry insiders said.

http://www.shanghaidaily.com/sp/article/2008/200804/20080417/article_356245.htm

[RiversideGator]

So much for the Chinese free traders.