CHINA’S central planner warned fertilizer companies Thursday not to raise prices of important ingredients and set a maximum range for mark-ups on imported fertilizers, amid concerns about rising prices.

Soaring oil prices helped to boost fertilizer prices both internationally and in China, leading planners to worry that farmers might stint on fertilizer and stunt the grains harvest.

“Right now spring planting is under way across China, so in order to curb inappropriate price gains, protect farmers’ profits and promote agricultural productivity, we are strengthening control over potassium chloride and compound fertilizer prices,” the National Development and Reform Commission said on its Web site Thursday.

Importers Sinochem and Sinoagri are allowed to mark up prices to domestic fertilizer producers by only 5 percent, or to trading companies by 3 percent. Prices at the point of sale could be marked up only 7 percent compared with the producers’ price, the NDRC said.

It added that it would set the import price for overseas shipments delivered to the port.

“Prices cannot rise any more, although they are allowed to fall,” it said.

China last month slapped an additional 100 percentage points on the export tariff on fertilizer, to prevent producers from profiteering from soaring international prices. The move came after Chinese importers agreed to pay triple for potash and sharply reduce volumes purchased under term contracts.

Sinofert Holdings Ltd., the Sinochem unit that was China’s largest distributor of imported fertilizers, expected a shortage of up to one-quarter of China’s annual demand of 11 million to 12 million tons of potash, its vice president said last week.

Agricultural officials and economists have written that soaring prices, especially for agricultural imports such as fertilizers and diesel, could reduce farmers’ willingness to grow crops or stimulate further food inflation.

An official from the State Administration of Grain denied Thursday that the official figure of grain reserves was inflated, saying that storage capacity outstripped output, so it was natural that China would have some empty granaries.

“The current reserve figure is true and reliable. There is no reason to believe otherwise from the information we have now,” Zeng Liying, deputy director of the administration, told the Xinhua news agency.

Lower grain production would raise the cost of feed, extending a rise in meat prices that drove headline inflation last year.

“Minimum rice prices have risen by only 10 percent, but fertilizer prices are up 30 to 40 percent,” said Liao Xiyuan, researcher with China National Rice Research Institute.

China was targeting a grain harvest of more than 500 million tons this year, as it sought a fifth consecutive year of rising harvests, the Ministry of Agriculture said last week.

(SD-Agencies)