China has asked some fertilizer producers to suspend urea exports after domestic prices jumped, a move that’s likely to restrict supplies and boost costs for farmers in key buyers such as India.
(Bloomberg) — China has asked some fertilizer producers to suspend urea exports after domestic prices jumped, a move that’s likely to restrict supplies and boost costs for farmers in key buyers such as India.
Some major Chinese fertilizer producers have halted signing new export deals from early this month following a government mandate, according to people familiar with the matter, who asked not to be identified as they’re not authorized to speak to the media. The restriction only applies to urea so far, they said.
Urea futures traded on the Zhengzhou Commodity Exchange surged almost 50% over a seven-week period from mid-June to the end of July, but prices have fluctuated since then and are around 11% lower this week.
China is the world’s top producer and consumer of urea and any significant decline in exports threatens to tighten supplies and push up global prices. Among the biggest export markets for the nation’s crop nutrient are India, South Korea, Myanmar and Australia.
China’s Ministry of Commerce and National Development and Reform Commission did not immediately respond to faxes seeking comment.
At least one producer has already publicly announced plans to reduce fertilizer exports. CNAMPGC Holding Co. said over the weekend that the company will curb shipments to secure supplies and maintain prices at stable levels.
The restrictions add another element of volatility to the global agriculture market, which has been affected by extreme weather across growing regions, export curbs by India and Russia’s war in Ukraine.
–With assistance from Dennis Ting and Sarah Chen.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.