Bloomberg News reported on the 7th that the Chinese government ordered domestic fertilizer companies to stop exporting urea.
It has been reported that large Chinese fertilizer companies have not signed new export contracts since early this month.
On China’s Zhangzhou Commodity Exchange, urea futures prices soared 50% from mid-June to the end of July and then fluctuated.
It is analyzed that the Chinese authorities judged that this price surge was due to a supply shortage in China due to export volume and began to control it.
But China is the world’s largest producer of urea, right? If export controls are implemented, the repercussions will be severe.
It is likely to trigger product shortages and rising prices in many parts of the world.
The countries that import the most Chinese elements are India, Korea, and Australia.
I can’t help but think of 2021.
At that time, China controlled urea exports due to a shortage of fertilizer supply.
As a result, the price of urea for automobiles rose in Korea and shortages appeared.
Since exhaust emission reduction devices are installed in diesel vehicles and urea water is essential, the impact felt by consumers was significant.
Is it because our country is highly dependent on China?
In fact, domestic companies have been working hard to diversify their import sources, but their dependence on Chinese elements has recently increased again.
In the first half of this year, the proportion of Chinese element 스포츠토토imports was calculated to be 89%.
It fell from 71% in 2021 to 66% last year, but the proportion increased again this year.
The rest are imported from Vietnam and Indonesia in that order, and as the price competitiveness of Chinese elements is overwhelming, domestic companies are beginning to prefer Chinese products again.
So, this measure is bound to have a big impact on domestic companies, right?
Korean petrochemical companies such as Lotte Fine Chemical and KG Chemical import urea from China to produce agricultural fertilizers and urea water used in diesel vehicles.
During the urea water shortage crisis in 2021, the price of urea water, which was usually around 10,000 won per 10 liters, soared nearly 10 times.
The domestic transportation industry is paying close attention to the news that the Chinese government is banning urea exports again.
However, some say that since we have increased our stockpiles of elements and secured alternative import sources in 2021, there will be less chaos like then.
But it could itself encourage the rise in urea prices, right?
As agricultural production costs increase, it may become another burden on fresh food prices, which are continuing to soar.
This is because fertilizer prices used by Korean farms may also rise along with international urea prices.
Some are analyzing whether China is once again weaponizing urea as a resource amid the intensifying conflict between the United States and China.
As China’s urea production is overwhelming, we must continue to closely monitor any changes in the supply situation and prices in the global market.