Huge hike in fertilizer export taxes

Agriculture

18 April 2008

Export taxes on fertilizer and some related raw materials export taxes will be raised by up to 100 percentage points, Bloomberg reported. The Ministry of Finance said the new tax rates will be in the 100-135% range. Current fertilizer export taxes range from zero to 35%, depending on the category the product is in. The new tariffs will take effect from April 20 and end on September 30. The move may be another attempt to rein in inflation and boost the flagging agricultural sector, Bloomberg said. However, the new taxes could severely restrict global supply of products like urea and ammonium phosphate and send global prices of fertilizers, which are already trading at record levels, even higher, an analyst said.

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