two people with fertilizer in a bucket

China Suspends Urea Fertilizer Exports as Domestic Prices Surge

China has issued directives to certain fertilizer manufacturers to halt exports of urea fertilizer due to a sharp increase in domestic urea fertilizer prices. This decision is expected to impact supply and raise costs for farmers in significant importing countries, including India.

Several major Chinese fertilizer producers have suspended new export contracts at the Chinese government’s request since the start of the month. As of now, these export restrictions exclusively apply to urea fertilizer.

Urea futures contracts on the Zhengzhou Commodity Market experienced a nearly 50% surge over the seven weeks from mid-June to the end of July. However, prices have since fluctuated and currently show an approximately 11% decrease this week.

China stands as both the world’s top producer and consumer of urea fertilizer. By restricting exports, there is a risk of tightening global supply and increasing worldwide prices. Key markets for China’s largest urea exports include India, South Korea, Myanmar, and Australia.

Notably, both the Chinese Ministry of Commerce and the National Development and Reform Commission (NDRC) have not yet provided official comments on this development.

In response to the situation, at least one producer has announced intentions to curtail fertilizer exports. CNAMPGC Holding Co. recently stated its plans to limit exports to maintain supply stability and price control.

These export restrictions add to the volatility in the global agricultural market, which has already been impacted by extreme weather events in various regions, restrictions on rice exports from India, and ongoing geopolitical conflicts such as the Russia-Ukraine war. As stakeholders monitor these developments, their implications for global agriculture and food security will remain a topic of significant interest.

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