China is tightening fertiliser exports to safeguard its domestic supply, industry sources say, adding pressure to global markets already strained by the U.S.-Israeli war on Iran.
China is among the largest fertiliser exporters – shipping more than $13 billion worth of it last year – and it has a history of controlling exports to keep prices low for farmers.
Shipments through the war-blocked Strait of Hormuz account for roughly one-third of the sea-borne supply. In mid-March, Beijing banned exports of nitrogen-potassium fertiliser blends and certain phosphate varieties, sources told Reuters.
The ban, which has not been formally unveiled, was reported earlier this week by Bloomberg News.
Added to existing bans and export quotas for urea, only a handful of fertilisers – notably ammonium sulphate – can be exported, five sources said. That would mean between half and three quarters of China’s exports last year are restricted, potentially up to 40 million metric tons, according to a Reuters estimate.
Beijing’s curbs, like its move last week to ban refined fuel exports, come as governments limit exports of products whose inputs have been threatened by disruption from the war, worsening shortages and higher prices around the world.
International urea prices have risen by around 40% from pre-war levels. In China, urea futures are near a 10-month high.
Dependent On China
Fertilisers are essential for plant growth and crop yields. Higher prices could lead to reduced usage, or farmers could switch to crops that require less fertiliser.
Last year, China sent Brazil, Indonesia and Thailand roughly a fifth of their fertiliser imports and that figure stood at a third for Malaysia and New Zealand, according to International Trade Centre data. For India, it was around 16%, according to its trade data.
When Will Exports Resume?
The Philippines on Wednesday said China had assured it that fertiliser exports would not be restricted.
Asked about the comments a day later, China’s Ministry of Foreign Affairs spokesperson referred the question to other departments.
China’s General Administration of Customs, National Development and Reform Commission and Ministry of Commerce did not immediately respond to requests for comment.
At a fertiliser conference in Shanghai on Wednesday, five salespeople said they did not expect the fertiliser bans to be lifted before August, after China’s peak June-to-August export period.
Producers are watching for signals from the government after spring planting to see whether bans would be extended.
(With inputs from Reuters)
