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Chinese fertilizer factories ‘focus on the domestic market’ as global prices rise

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Global fertilizer prices have hit record levels this year, as farmers are now anxiously watching manufacturers in China.

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According to Reuters, some major Chinese fertilizer companies said they would “temporarily suspend exports” to secure supplies in the domestic market.

Wes Lefroy, chief agricultural analyst at Rabobank, said the advice from colleagues in China is that there is no official forbid on fertilizer exports.

“Our latest observation is that there are some directives the government has given to locals [fertiliser] Companies to focus on the domestic market and [to] Make sure to supply the local market in China.”

“So there is some concern about the availability of exports in the coming.”

Mr Lefroy said Australia relies heavily on imported fertilizers, especially mono-ammonium phosphate (MAP) from China.

A vertical bar graph showing the varying amounts of MAP fertilizer imported from China.
Graph showing the quantities of Mono Ammonium Phosphate (MAP) fertilizer imported from China since September 2016.(

Supplied: Thomas Elder Markets

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Rising prices

According to Rabobank, global urea prices are up 60 to 70 percent this year and Diammonium Phosphate (DAP) has increased by as much as 75 percent.

Lefroy said the price “has skyrocketed” for a number of reasons, including tight supply, big demand from farmers and “ongoing shipping commotion,” where sea freight has added up to 10 percent to farmers’ costs.

Rabobank expects fertilizer prices to remain at elevated levels for at fewest the rest of the year.

Business analyst David Hanlon said farmers who held off on buying the product were now hurt.

He said many agencies are now revising their fertilizer price forecasts, and many expect prices to remain lofty in 2022.

A man stretched out his hands holding the compost pellets from a vast pile in fore of him
Global fertilizer prices have risen sharply this year and supply has shrunk.(

ABC Rural: Bridget Hermann

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Analysts are watching the Winter Olympics?

Lefroy said China’s history of pollution targets has also been a potential risk to fertilizer availability.

“Normally, there is more pollution in the winter, when local people preserve warm… We have seen, in the former, some restrictions around industrial production in order to decrease pollution, which can affect fertilizer production,” said Mr. Lefroy.

“The other factor we are seeing is the upcoming Winter Olympics in February 2022, where the government may make some sort of effort to decrease the smog in the region, which could also affect industrial production.

Referensi: www.abc.net.au

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