In October 2021, the Chinese government implemented a fertilizer export control policy, known as "legal inspection", to control prices and ensure food security. This policy means that all products subject to legal inspection are subject to quotas, which means, for example, that China will set an annual export quota for each fertilizer product, and once the sum of the quotas applied for by all traders or factories for a product reaches the country's full quota, that product cannot be reapplied for this year (or will face a very high tax). At the same time, the whole process of legal inspection of the product takes more than 50 days, thus preventing the goods from being sold abroad ( The main objective is to stabilise prices in the domestic fertiliser market, thereby benefiting farmers), which was to be implemented until June 2022, but has been extended and there is no indication when it will be abolished. The products most affected by this policy are urea, monoammonium phosphate and diammonium phosphate, as well as other NPK fertilizer blends that are not very profitable.
Based on this policy, when we export fertilizers, we will divide the products into two categories.
Goods that require legal inspection and goods that do not require legal inspection, and their main differences are –
The preparation process and time consuming after the transaction
Usually, for products that require legal inspection, it is necessary for the factory (that is, the manufacturer) to apply for a quota to the national customs first, and then the entry-exit inspection agency sends staff to the factory warehouse to perform inspection on the products that need to apply for the quota.
Time consuming: the above process generally ranges from 60-90 days.
Adding the time of river and sea transportation, it sometimes takes nearly four to five months for such goods to be received after the purchase and payment.
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