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CHINA OFFICIALS TELL FERTILIZER INDUSTRY TO HALT EXPORTS OF UREA
Sep. 8, 2023
By Hallie Gu with assistance from Dennis Ting and Sarah Chen, 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 makers 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 on the Zhengzhou Commodity Exchange surged almost 50% over a seven-week period from mid-June to the end of July, but have fluctuated since. Prices slid almost 6% on Thursday, snapping two days of gains.
Low Chinese inventories and higher exports had combined to push urea prices higher, said Chen Li, an analyst with Huatai Futures in Guangdong. "Fertilizer use in crops like soybeans and corn in the first half of the year should have risen due to more top-dressing demand after extreme weather," she said.
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.
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