Fertilizer shortage like flapping of butterfly wings

At present, global energy prices are still at a high level. It is difficult to reduce them in the short term. Under these conditions, there will be a shortage of chemical fertilizers or the possibility of continuous price increases because of reduced production due to the cost of energy. The shortage of fertilizers will have a major impact on global agricultural planting, including reduced production due to reduced use of chemical fertilizers, leading to a sharp rise in food prices, and structural shortages due to changes in planting.

China is the world”s main supplier of urea and other fertilizer products, and India, Pakistan and Southeast Asian countries are the main buyers. From January to September this year, China exported a total of 26.11 million tons of various fertilizers, a year-on-year increase of 31 percent, and the cumulative export value was $9.03 billion, a year-on-year increase of 99.5 percent. Because domestic coal and natural gas prices have risen sharply in the international market, the cost pressure on fertilizer manufacturers is too high, and the international market prices are higher than domestic ones, therefore, export enthusiasm is higher, which will aggravate domestic shortages and promote price increases.

A few days ago, the General Administration of Customs issued an announcement that, starting from the 15th of this month, clearance from the entry-exit inspection and quarantine authorities is required for exports of fertilizer. This means that the country is aware of the problem and is adopting export control measures.

But it is essential to stabilize and smooth the industrial supply chain as soon as possible. Otherwise, in the spring tillage season, there might be panic buying in the chemical fertilizer market that will directly influence grain output next year and trigger chain reactions in other fields.

China is basically self-sufficient in coal, chemical fertilizers, and grain, but if their supply is not well controlled, it would easily trigger a chain reaction. China must ensure energy security, fertilizer security and food security, otherwise it will affect the whole country.