The quotas, set well below year-ago export levels, would expand China’s intervention in the market to keep a lid on domestic prices and protect food security while global fertiliser prices are hovering near record highs.
Last October, China also moved to curb exports by introducing a new requirement for inspection certificates to ship fertiliser and related materials, contributing to tight global supply.
Fertiliser prices have been buoyed by sanctions on major producers Belarus and Russia, while surging grain prices are boosting demand for phosphate and other crop nutrients from farmers around the world.
China is the world’s biggest phosphates exporter, shipping 10 million tonnes last year, or about 30% of total world trade. Its top buyers were India, Pakistan and Bangladesh, according to Chinese customs data.
China appears to have issued export quotas for just over 3 million tonnes of phosphates to producers for the second half of this year, said Gavin Ju, China fertiliser analyst at CRU Group, citing information from about a dozen producers who have been informed by local governments since late June.
That would mark a 45% drop from China’s shipments of 5.5 million tonnes in the same period a year ago.
The National Development and Reform Commission, China’s powerful state planning agency, did not respond to a request for comment on its quota allocations, which have not been announced publicly.
Although China has imposed export duties on fertilisers in the past, the latest measures mark its first use of inspection certificates and export quotas, analysts said.
Other major producers of phosphates, such as widely used diammonium phosphate (DAP), include Morocco, the United States, Russia and Saudia Arabia.
The surge in prices over the last year has raised concerns for Beijing, which needs to guarantee food security for its 1.4 billion people even as all farm input costs surge.
Domestic Chinese prices remain at a significant discount to global prices, however, and are currently about $300 below the $1,000 per tonne quoted in Brazil, incentivising exports.
China’s phosphate exports rose in the first half of 2021 before dropping off in November, after the requirement for inspection certificates was introduced.
DAP and monoammonium phosphate exports in the first five months of this year totalled 2.3 million tonnes, down 20% from a year ago.
