Notice of National Development and Reform Commission on Perfecting Potash Fertilizer Price Management Policy

Notice of the National Development and Reform Commission on Perfecting Potash Fertilizer Price Management Policy

Provincial Development and Reform Commission, Price Bureau, China Agricultural Production Information Group Corporation, China Sinochem Corporation, China National Offshore Oil Corporation, and Chinachem International Trade Co., Ltd.:

In order to adapt to the changes in the potash fertilizer market at home and abroad and to ensure the supply of potash fertilizer, with the approval of the State Council, it has decided to further improve the management of potash fertilizer prices. The relevant matters are hereby notified as follows:

First, improve price management. The base price for import of potash fertilizers for general trade import was changed to the enterprise's formulation of pricing methods based on state regulations. Importing companies can set specific port delivery prices based on the port delivery base price, within a range of up to 3%, and floating down. The above price delivery location is the port terminal. If an import company delivers goods outside the port through its own branch (distribution center or other non-independent legal entity), such as financial expenses, storage fees and other operating and management expenses, it may add up to 1% on the basis of the port delivery limit price. If there is no sales charge for management fees, such as financial fees and storage fees, the port delivery price should be enforced. The miscellaneous charges incurred in the delivery outside the port can be collected according to the actual situation.

The ex-factory prices of domestic potash fertilizers and the sales prices of imported potash fertilizers in border trade continued to be market-regulated.

Second, establish a potash price filing system. The general trading potash fertilizer importing enterprises must, before the 15th of each month, import the general trade import potash fertilizer to the volume, import cost, estimated port delivery base price, actual sales price, etc., as well as each import contract, tariff payment book, and import before last month. A copy of the purchase invoice, etc., shall be submitted to the Committee of the People's Republic of China (Price Division) for record; before January 30 of each year, the import volume of potash, the main sales target, the sales volume, the sales price, and the inventory amount shall be reported to the Committee. Price Division and Price Supervision and Inspection Department)

Third, increase the supervision and inspection of potash fertilizer prices. The competent price departments at all levels shall continue to strengthen the supervision and inspection of the implementation of imported potash fertilizer pricing policies, seriously investigate and punish potash fertilizer import enterprises for failing to formulate port delivery prices according to the stipulations set by the state, and failing to file records according to regulations; Collusion increases prices, drive up prices and other illegal activities.

Fourth, the implementation of time. The above regulations shall be implemented as of February 10, 2009. The provisions that the actual port delivery price can be increased by 3% have been implemented since July 1, 2009.

National Development and Reform Commission

February 6th, 2009