Green Asia

China slows fertiliser exports, raising industry concerns in India

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BEIJING/MUMBAI : Around half a million metric tons of urea are held up at Chinese ports after China curbed exports of the key fertiliser following a price surge, an analyst and Indian company official said.

As the world’s largest producer of urea, China accounts for about a third of global supplies of the nitrogen-based fertiliser, which is critical to growing crops.

Two Chinese state-owned urea producers will prioritise domestic supply, company notices this month showed, while port inspections on some cargoes of the chemical have been suspended, Gavin Ju, principal fertiliser analyst at CRU Group, said.

China’s National Development and Reform Commission (NDRC) did not immediately respond to a request for comment.

About half a million metric tons of urea bought by Indian Potash Limited (IPL) is currently being held at the Chinese port of Tianjin, awaiting inspections and clearance, said Ju.

An Indian fertilizer industry official told Reuters there had been an unusual delay in the loading process because of inspections.

An official at China’s general administration of customs said it could not immediately comment on the situation.

India’s Rashtriya Chemicals and Fertilizers Limited (RCF) may also struggle to secure large purchases of over one million tons in a recently issued tender, said Ju.

Neither Indian company immediately responded to requests for comment.

Urea futures on China’s Zhengzhou Commodity Exchange reached 2,600 yuan ($353.84) per ton on Sept. 1, the highest level since March, after a surge in demand from India, triggering efforts to slow shipments.

CNAMPGC Holding Ltd, one of China’s top fertiliser exporters, said it will proactively decrease exports and “make every effort” to ensure domestic supply and price stability, according to a notice dated Sept. 2 on its website.

State-owned China National Offshore Oil Company (CNOOC) has also urged its subsidiaries to prioritise urea supply to the domestic market ahead of the autumn sowing season, according to a Sept. 4 notice seen by Reuters.

CNOOC did not immediately respond to a request for comment.

China’s urea futures have declined about 4 per cent since the Chinese companies’ announcements.

But the Chinese curbs will raise global prices and spending by India on fertilisers, said Indian company officials, who declined to be named because of company policy.

India imports about 30 per cent of around 35 million metric tons needed each year for its vast agriculture sector and China was its second largest supplier last year.

Supplies from Oman, Saudi Arabia, Egypt, and Russia could fill the gap, said an Indian industry official.

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