Low Phosphorus Fertilizer Industry in Yunnan Expectation Optimization
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October 08 09:00:35, 2025
With the rapid growth of high-concentration phosphate and compound fertilizer industries, low-grade phosphate fertilizers have faced increasing challenges, including rising transportation costs and fierce competition in raw material markets. In response to these difficulties, the future development of Yunnan's low-grade phosphate fertilizer industry has become a pressing issue. Recently, this reporter conducted an in-depth investigation into the current state and future direction of the sector.
Rong Shaoyou, vice president of the Yunnan Chemical Industry Association and director of the Chemical Fertilizer Commission, emphasized that low-grade phosphate fertilizers still play a significant role in Yunnan’s phosphate industry and are a key national production base. According to data from the end of 2006, there were 91 officially licensed low-grade phosphate fertilizer companies in Yunnan, with an annual industrial output exceeding 2 billion yuan. Among them, 11 companies produced calcium magnesium phosphate fertilizers, with a total annual capacity of 1.34 million tons, and actual output reached around 600,000 tons in 2006. Additionally, 80 general calcium companies had a combined annual capacity of 8.86 million tons, with actual output of approximately 4.8 million tons that year.
Li Wenguo, chairman of the Yunnan General Calcium Marketing Consortium and head of Yunnan Phosphate Chemical Fertilizer Co-marketing Co., Ltd., pointed out that small and scattered enterprises, outdated technology, and chaotic market competition remain major issues in the low-grade phosphate fertilizer industry. Many companies have been operating on thin margins for years, making them vulnerable to risks and unable to achieve economies of scale.
As high-concentration phosphate and compound fertilizer industries expand rapidly, Yunnan has focused its transportation and logistics efforts on these more profitable products, leading to a sharp decline in demand for traditional low-grade phosphate fertilizers. For instance, in the mid-1990s, the province had a total calcium production capacity of 1.6 million tons, which has now dropped to just hundreds of thousands of tons. Due to poor access to the market, many local calcium companies are struggling to survive.
However, Rong Shaoyou believes that low-grade phosphate fertilizers will continue to be essential for some time. He argues that it is impossible to ignore their importance as they meet specific agricultural needs. Superphosphate and calcium magnesium phosphate fertilizers contain essential nutrients like sulfur, calcium, magnesium, and silicon—elements that are difficult to replace in most chemical fertilizers. These products complement other fertilizers and help balance nutrient intake in crops, making them highly valuable in China’s agricultural system.
Li Wenguo further explained that deep-rooted problems within the low-grade phosphate fertilizer industry have not yet been resolved. Overcapacity remains a critical issue, necessitating structural adjustments. In line with the Yunnan Provincial Economic Commission’s industrial restructuring guidelines, 11 low-grade calcium fertilizer companies established Yunnan Phosphate-Based Chemical Fertilizer Co-marketing Co., Ltd. in August 2007. The company is now working under the principles of “unified market, unified price, unified brand, and unified transportation,†aiming to consolidate smaller, scattered companies into a more organized and efficient industry.
According to Yunnan Province’s “Superphosphate Industry Access Requirements†issued in 2005, by 2010, any general-purpose units with an annual output of less than 200,000 tons would be phased out. This move reflects the government’s push toward consolidation and modernization.
Li Wenguo believes that forming a joint marketing company and gradually consolidating the industry through collaborative efforts is the future trend for the general calcium fertilizer sector. Such initiatives are seen as crucial steps toward sustainable development. It is expected that Yunnan’s low-grade phosphate fertilizer industry will undergo significant structural changes and enterprise optimization in the coming years.