Fertiliser woes: China to curtail exports until 2022

News from China overnight of restricted fertiliser exports could put pressure on an already strained industry.

Fertiliser could continue to face headwinds into 2022, according to one industry expert. Picture: Zoe Phillips

A snap decision from Chinese provincial governments to curtail fertiliser exports until mid-next year could add pressure to an already strained fertiliser industry, posing a challenge for Australian producers.

It is understood the Chinese national government introduced a series of reforms including increased inspections of fertiliser export cargo.

Thomas Elders Markets analyst Andrew Whitelaw said provincial governments confirmed the banning of fertiliser from state-owned enterprises.

“It’s still a substantial volume. That’s until June next year,” Mr Whitelaw said.

Mr Whitelaw said the Chinese Government was concerned about the rising cost of fertiliser.

“But curtailing exports takes that volume away from the international market and put it into the domestic market … it makes it cheaper for Chinese farmers,” Mr Whitelaw said.

“It’s a bad situation for us, as fertiliser users. This is a big chunk of fertiliser produced in China that won’t be exported, but kept for domestic use. Private enterprises will still be able to export but they may face headwinds.”

Mr Whitelaw said the news from China was just the latest in a series of issues to plague the fertiliser industry across the world.

“There are fertiliser issues in Europe, there’s a situation in the EU where they’ve shut down a lot of plants because the cost of the gas to run them is too high,” Mr Whitelaw said.

“You’ve got problems in the US with Hurricane Ida, impacting production and logistics. And in China the price of coal has gone through the roof.

“There are all these headwinds coming for fertiliser.”