Industry media “15 major companies signed an agreement on voluntary restrictions on exports”
While the Chinese authorities recently suddenly suspended customs clearance for urea exports to Korea, it was confirmed that major companies in the Chinese fertilizer industry agreed to voluntarily limit the total amount of exports next year.
Recently, Zhongfeiwang (China Fertilizer Network), a media outlet specializing in the Chinese fertilizer industry, said, “At a meeting held on November 24, 15 major Chinese element stockpiling and trading companies, including Zhongnong Group and Zhonghua Group, announced that their total export volume in 2024 will not exceed 944,000 tons. They agreed not to do so, and signed an agreement on voluntary (limitation) exports of urea in 2024.”
The media also reported, “The 15 companies (that signed the agreement) can receive an export inspection (permit) certificate at the export port, but other companies must receive an inspection certificate during the shipping process.”
The media continued, “Recently, there are rumors that exports will be completely restricted and exports will not be allowed until the first quarter of 2024,” adding, “Currently, at some export ports, exports are not possible even with supporting documents, and cargo is piled up at the port or cargo is not allowed.” He said, “Recoveries are happening.”
He added, “It remains to be seen how these rumors will affect element prices.”
According to the Korean government and industry, on the 30th of last month, China’s General Administration of Customs suddenly withheld the export of industrial elements that a local Chinese company was trying to export to a large Korean company.
Analysis suggests that the Chinese authorities are suspending customs clearance in order to first resolve domestic urea supply and demand.
However, it is known that China’s recent urea production is at a relatively high level.
According to Zhongfeiwang, China’s daily urea production so far this year has been at a minimum of 140,000 tons and an average of 160,000 to 170,000 tons, but recent production is about 174,200 tons.
Meanwhile, according to the Korea Customs Service, the share of Chinese products in urea imports fell from 71.2% in 2021 to 66.5% last year, but soared again to the 90% range this year.
This means that if China stops exporting urea and disrupts domestic supply and demand, the urea crisis that threw the country into chaos in the second half of 2021 could be repeated.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.