December 13, 2024 | 11:44 GMT +7
December 13, 2024 | 11:44 GMT +7
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The curbs imposed earlier this month apply to urea, a nitrogen-based fertilizer, and phosphates, according to people familiar with the matter, who didn’t want to be named discussing a sensitive issue. In years past, China has been a key supplier of the two types, and the new restrictions risk pushing up prices of essential crop nutrients around the world.
Exports of urea and phosphates had already slowed this year, to a trickle in the case of the former, after limits put in place at the end of 2023. Now, urea shipments have been halted entirely, the people said. For phosphates, customs is stepping up inspections on outbound cargoes, which could reduce sales even more, they said.
A fax sent to China’s customs administration seeking comment didn’t get an immediate response.
China’s policymakers are contending with a number of worrying signals from the agricultural sector. Farmers are struggling with depressed grain prices and elevated costs, which has led to measures to protect the domestic market. At the same time, extreme weather events pose a rising threat to crop production in the country’s main growing regions. Local urea futures, which dropped to a nine-month low at the start of April, have staged a rebound.
Total fertilizer exports from China actually climbed to a six-month high of nearly 2.5 million tons in May, as sales of ammonium sulfate, another nitrogen-based nutrient, offset the drop in the other products. China typically imports the third main fertilizer type, potassium-based potash.
As recently as 2020, China was the world’s second-biggest fertilizer exporter after Russia. But rising prices, particularly after Moscow’s invasion of Ukraine, forced Beijing to limit sales, which it has periodically relaxed and tightened according to circumstances. In 2023, it was still the world’s top supplier of both urea and the world’s most widely used phosphate.
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(Bloomberg)
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