China may implement urea export quotas in 2024, affecting South Korean imports

The Chinese government has reportedly informed its domestic fertilizer companies of plans to introduce a urea quota system starting from 2024. This development is aimed at regulating the volume of urea exported to other countries, including South Korea, marking a significant shift in China’s fertilizer export policy.

Industry and government sources revealed on Monday that South Korean urea water solution businesses have been notified by their Chinese counterparts about the impending quota system. This announcement follows previous reports that Chinese authorities had suspended customs processes for urea exports to Korea.

This policy shift is poised to have a profound impact on the South Korean urea industry, which is heavily dependent on Chinese imports for approximately 90% of its vehicle urea needs. The anticipated reduction in urea imports from China could potentially lead to price increases or shortages in South Korea.

China, a major player in urea production, generates about 50 million tons annually. Insiders suggest that a certain proportion of this production may be allocated for exports under the new quota system.

Experts in the Chinese fertilizer sector indicate that the export restrictions could extend at least until the first quarter of next year. They speculate that these measures may persist, considering China’s domestic supply dynamics.

Meanwhile, the Korean government has yet to issue an official response, stating that China’s urea quota system has not been formally confirmed. The situation continues to be closely monitored, given its potential implications for the South Korean urea market and broader agricultural sector.

Source: Pulse