In a move to secure domestic supplies and stabilize prices, a major Chinese fertilizer group has called on its members to curb exports and recall shipped cargoes. This is the latest effort by the nation to restrict the shipment of crop nutrients. The China Nitrogen Fertilizer Industry Association, a group under the management of the Ministry of Civil Affairs, has issued a notice urging producers to limit exports and keep factory prices below the levels recorded on November 16th. Additionally, if profit margins are high, the group recommends lowering sale prices.
The Chinese government took similar action in September when it requested some exporters to suspend the export of urea due to a surge in domestic prices. This initially helped to cool down the cost of local supplies. However, prices started to rise again last month, prompting the association to issue these new measures.
Fertilizers are crucial inputs in food production, especially for staple grains, and major producers of these crop nutrients include Russia and Belarus. However, the war in Ukraine has resulted in sanctions on these nations, disrupting the fertilizer trade. With China now imposing additional restrictions on exports, the global fertilizer market is expected to face even more tightening.
According to the US Department of Agriculture, in 2020, Russia and Belarus accounted for nearly 20% of the global trade in nitrogen, phosphate, and potash fertilizers. China, on the other hand, held an export share of approximately 12%. These figures highlight the significance of these countries in the global fertilizer market and the potential impact of the export restrictions imposed by China.
By curbing exports and recalling already shipped cargoes, Chinese fertilizer producers aim to ensure an adequate supply of fertilizers for domestic consumption and stabilize prices. This move reflects the Chinese government's commitment to prioritize the needs of its agricultural sector and address any potential disruptions caused by international sanctions and trade tensions.
As the world grapples with food security and increasing demand for agricultural products, the availability and affordability of fertilizers play a crucial role. It remains to be seen how these restrictions will impact the global fertilizer market and how other major fertilizer-producing countries will respond to meet the growing needs of their domestic markets.