China soon to announce export duty on DAP/MAP

20 December 2007 12:13  [Source: ICIS news]

LONDON (ICIS news)--An official announcement from China's Finance Ministry regarding the proposed export tax on phosphate fertilizer is expected on Friday, producer sources confirmed on Thursday.

Sources said it was generally accepted that a 20% duty would apply to first- and fourth-quarter exports of diammonium phosphate (DAP) and monammonium phosphate (MAP), while a 30% levy would apply to exports in the second and third quarters.

Opinion among Chinese producers was divided as to whether this would adversely impact exports from China next year, in turn further tightening an already very bullish international DAP market.

Some thought exports would be severely curtailed, with probable DAP FOB (free on board) levels in excess of $700/tonne (€490/tonne) in January.

There were also rumours that the 13% sales tax applicable to DAP in the domestic market would be removed in order to encourage domestic DAP consumption and make it easier for producers to sell into the domestic market.

Even so, other producers thought that any export tax would have to be at least 50% to rein in exports in the first quarter, hence there would be export availability in the international market, albeit not at the same substantial levels seen in the first half of 2007.

Major Chinese DAP and MAP producers include Wengfu and Kailin.

($1 = €0.70)

By: Mike Nash
+44 20 8652 3214

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