The crisis in the fertilizer market has prompted China to tighten export restrictions, prioritizing the interests of its own farmers.
According to available data, geopolitical events in the Middle East have significantly impacted the global fertilizer market.
Since Iran is currently blocking shipments through the Strait of Hormuz, this directly impacts logistical capabilities for importers and exporters.
As a result, a shortage is emerging in the global fertilizer market, followed by rising prices. For example, the price of urea has risen by approximately 40% since the beginning of this year.
At the same time, food security is a highly sensitive issue for China, experts note.
While the country has not yet achieved complete food self-sufficiency, it is actively striving to do so.
At the same time, a fertilizer shortage threatens to trigger further increases in grain and feed prices within the country. For the Chinese leadership, this is an extremely undesirable scenario, so they are taking proactive measures to prevent it.
In particular, in mid-March, Beijing already imposed a ban on the export of nitrogen-potassium fertilizer mixtures and certain phosphates. Analysts believe this ban may have been related to the complicated geopolitical situation in the Middle East.
However, a new package of measures was recently adopted. According to this package, in addition to the existing urea quotas, between half and three-quarters of the country’s total exports last year, amounting to approximately 40 million tons, are now subject to restrictions.
Only certain products, particularly ammonium sulfate, remain permitted for export. This suggests that China is minimizing its fertilizer exports, focusing primarily on supplying its domestic market.
Rising fertilizer prices, if uncontrolled exports from the country lead to shortages, risk reducing Chinese farmers’ ability to produce good harvests or raising production costs, which will ultimately exacerbate food inflation.
Experts agree that a relaxation of export policy is not expected anytime soon.
Strict restrictions will likely remain in place until at least August—the end of China’s peak export season.
As a result, importers dependent on Chinese fertilizers are already facing rising prices for this product.
