Summary : China, the world's top fertilizer
producer, adopted a "domestic first, moderate export" policy in 2025.
It limits exports, sets a May - September window, and bans sales to India. Tax
adjustments control small - package exports, and Southeast Asia is targeted for
market expansion. Reserve requirements, import restrictions, and dual - track
pricing ensure food security while safeguarding industry interests.
As the world's largest fertilizer producer,
China's recent policies feature a dual approach of "domestic priority +
moderate export." In essence, this is achieved through three strategies:
total quantity control, structural optimization, and risk hedging, striking a
balance between ensuring food security and safeguarding industrial interests.
1.Total Quantity Control
The total fertilizer export volume in 2025
is strictly limited to no more than the scale in 2023 (for example, the urea
export volume is locked at 4.25 million tons), representing an incremental
space of 4 million tons compared to 250,000 tons in 2024.
This mechanism not only releases excess
production capacity (the domestic urea production capacity is expected to reach
70 million tons in 2025, with an excess of about 10 million tons) but also
prevents exports from impacting domestic agricultural demand.
The export window is set from May to
September, staggering the peak demand periods of domestic spring plowing and
summer sowing, ensuring stable supply during crucial farming seasons.
Meanwhile, export enterprises must meet two
mandatory indicators: the national fertilizer commercial reserve task
(including off-season reserves and disaster relief fertilizer reserves) and the
minimum production plan. The National Development and Reform Commission
distributes export quotas through a weighted scoring system and issues them in
two batches.
For example, among the 7 million tons of
phosphate fertilizer export quota, leading enterprises like Yuntianhua can
obtain a quota of 2 million tons, reflecting a preference for enterprises with
strong supply guarantee capabilities.
This design links export qualifications
with domestic supply responsibilities, preventing enterprises from focusing solely
on exports while neglecting domestic supply.
This year, the export of fertilizers to
India is clearly prohibited.
As a traditional major importer of Chinese
urea (accounting for 45.49% of export volume in 2023), India's demand gap may
shift to Southeast Asian markets (such as Vietnam and the Philippines).
This measure not only eases domestic supply
pressure but also reduces dependence on a single market through market
transfer, avoiding geopolitical risks.
2. Structural Optimization
Since January 1, 2025, the tax regulation
adjustment classifies small-packaged fertilizers. The classification rule is
changed from "gross weight per package not exceeding 10 kilograms" to
"gross weight per piece not exceeding 10 kilograms," and "piece"
is clearly defined as the transport package (such as a pallet), greatly
increasing the difficulty of export compliance.
The export volume of small-packaged
fertilizers reached 500,000 tons in 2024 (the second-highest in history), and
after the policy adjustment, the export volume is expected to decrease
significantly, preventing circumvention of supervision through package
splitting.
After the ban on exporting to India, the
Southeast Asian market becomes a key area for expansion.
Vietnam imported about 1.2 to 1.5 million
tons of urea from China in 2024, and the Philippines imported 649,100 tons of
urea in 2022 (China accounted for 33.9%). It is expected that part of the
demand will be transferred in 2025.
The upgrading of logistics channels such as
the China-Thailand Railway and the China-Laos Railway reduces transportation
costs and helps diversify export markets.
The European Union's Carbon Border
Adjustment Mechanism (CBAM) requires exporters to calculate carbon emissions
using standard methods during the transition period.
Although China's fertilizer exports have
not been significantly affected for the time being (exports to the EU were only
300 million euros in 2024), leading enterprises have already made early
arrangements for carbon accounting systems (such as the digital platform of
Hebei Iron and Steel Group) in preparation for potential policy tightening.
3.Risk Hedging
The national fertilizer commercial reserve
task (including off-season reserves and disaster relief fertilizer reserves)
becomes a prerequisite for enterprise export qualifications, ensuring that
reserves can be released into the market during critical periods.
By the end of January 2025, the inventory
of fertilizers in the supply and marketing cooperative system was 22.84 million
tons, a year-on-year increase of 15.6%. Coupled with the planned procurement of
27 million tons, it can meet 70% of the national spring plowing fertilizer
demand. The total inventory of domestic urea enterprises decreased to 1.275
million tons in March 2025, a decrease of 147,500 tons compared to the previous
week, indicating that the supply is accelerating its distribution to the
grassroots level and ensuring sufficient supply at the primary level.
The total import tariff quota for
fertilizers in 2025 is set at 13.65 million tons, including 3.3 million tons of
urea, 6.9 million tons of diammonium hydrogen phosphate, and 3.45 million tons
of compound fertilizers. State-owned trade quotas account for more than 70%
(for example, the state-owned trade quota for urea is 2.97 million tons),
protecting domestic production capacity by restricting the import of
fertilizers high in nitrogen, phosphorus, and potassium.
From January to April 2025, the import
volume of potash fertilizers decreased by 18% year-on-year, accelerating
domestic substitution.
The domestic fertilizer price implements a
"dual-track system." The export price is linked to the international
market (for example, the export price of diammonium phosphate reaches 785 US
dollars per ton), while the domestic price is maintained stable through reserve
releases, production capacity adjustments, and other means (the mainstream
ex-factory price of urea is 1,810-1,900 yuan per ton).
The National Development and Reform
Commission has reserved a dynamic adjustment mechanism. If the domestic price
exceeds the threshold of 2,000 yuan per ton, it may trigger quota tightening or
national reserve releases to curb irrational price increases.
This policy combination precisely regulates
exports through a quota system, export windows, and targeted embargoes,
avoiding disorderly competition. On the supply side, it strengthens the
domestic supply guarantee line through a reserve system, import restrictions,
and production capacity optimization.
At the same time, it promotes technological
upgrading and green transformation in the industry, enhancing international
competitiveness.
It
not only responds to the dual objectives of domestic agricultural demand and
ecological protection but also seizes the initiative in the global fertilizer
trade game, laying the foundation for the long-term sustainable development of
the industry.
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