China imposes export restrictions on some fertilizer producers
- September 7, 2023
- Posted by: Quatro Strategies
- Categories: China, Sanctions & Regulation
China has taken the step of instructing some fertilizer producers to suspend urea exports as a response to rising domestic prices. This move is expected to limit supplies and lead to increased costs for farmers in major importers like India.
Prominent Chinese fertilizer producers have ceased entering into new export agreements since the start of the month as per government orders. Currently, these restrictions pertain solely to urea.
Urea prices experienced a nearly 50% surge on the Zhengzhou Commodity Exchange during a seven-week period from mid-June to the end of July. However, prices have been subject to fluctuations since that time and are currently approximately 11% lower this week.
As the world’s leading producer and consumer of urea, China’s decision to reduce exports has the potential to constrict global supplies and drive up prices. Some of the key export markets for Chinese urea include India, South Korea, Myanmar, and Australia.
While at least one producer, CNAMPGC Holding Co., has made public announcements about its intention to curtail fertilizer exports to maintain stable supplies and prices.
These restrictions introduce another layer of volatility to the global agricultural market, which has already grappled with extreme weather events, export constraints in India, and the conflict in Ukraine involving Russia.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
U.S. to announce winners of federal hydrogen grants on Friday
The Biden administration is poised to unveil the recipients of a substantial $7 billion in federal grants on Friday, representing a critical step forward in the United States’ ambitious efforts to develop regional hydrogen hubs. This significant announcement comes after months of fierce competition among various states, each vying for a portion of the funding, all in a bid to accelerate the production of 50 million metric tons of…
Washington’s 25% truck tariff to hit allies first
A U.S. blanket 25% tariff on all imported medium and heavy-duty trucks starting Nov. 1 is a blunt instrument aimed at forcing production onshore, and it hits friends harder than foes. Most of the targeted vehicles come from U.S. allies under deeply integrated North American and transatlantic supply chains. Mexico alone supplies the bulk of U.S. medium/heavy truck imports, with Canada, Japan, Germany and Finland also in the top five.
Layering a national-security tariff over USMCA-era value-add rules upends the assumption that meeting rules of origin would guarantee tariff-free entry, and it introduces a second, discretionary filter Washington can use to steer investment. In the near term, a pre-deadline import surge is possible, followed by a sharp drop in cross-border truck flows and a scramble by OEMs and fleets to reprice contracts and reroute production.
Challenges mount for China’s economy as manufacturing struggles continue in early 2024
China’s manufacturing activity faced contraction for the fourth consecutive month in January, as indicated by the official purchasing managers’ index (PMI), which increased marginally to 49.2 from 49.0 in December. The 50-mark separates growth from contraction. The data suggests that China’s…