A new policy instituted by the China Agricultural Means of Production Association and National Development and Reform Commission could lead to reduced availability of urea, DAP, and MAP in the global market.
Under the policy, which came together during a meeting with the two regulatory agencies and 15 Chinese trading companies, total fertilizer exports will be limited to 3-4 million mt through the first quarter of 2025. In addition, China has immediately halted urea export-related inspections at most ports, although large quantities already cleared for India are not affected.
The policy will establish quotas for traders, with industry sources expecting Sinofert and CNAMPGC to get the lion’s share of the quotas. The plan calls for traders to buy directly from the factory at an ex-plant price and then decide to export or keep the product in the domestic market.
Once the total amount of allowed exports is achieved, one source said, no more exports will be allowed, and traders holding material will be forced to sell it in the domestic market.
The plan lumps the fertilizers into one basket. One trader noted that if Chinese traders secure urea for the next Indian tender, most of the allotment of all fertilizers could be covered in one go, leaving DAP and MAP buyers with no options.
So far this year, China has exported 5.7 million mt of MAP and DAP and 3.4 million mt of urea, according to Trade Data Monitor. Exports in previous years have also exceeded the new limits, except for 2022 when exports were restricted by the government.
| China Exports | |||
| Year | Urea, DAP, MAP | DAP and MAP | Urea |
| 2018 | 12,400,805 | 9,957,804 | 2,443,001 |
| 2019 | 13,811,007 | 8,866,369 | 4,944,639 |
| 2020 | 13,713,062 | 8,262,975 | 5,450,087 |
| 2021 | 15,334,140 | 10,040,525 | 5,293,615 |
| 2022 | 8,439,435 | 5,610,147 | 2,829,288 |
One trader said the move could lead to lower export prices for the limited tonnage. Building up domestic stockpiles is designed to drive down prices. One source said the levels could be well below the global market.
All it would take is an additional $5-$10/mt to move the product to a port for export, said one trader, providing a limited amount of lower-priced material for the export market. Others were not so sure prices would come down.