"Element Stock Depletion" Fertilizer Plant at Limit... Government Says "No Problem Until February Next Year"

Fertilizer Raw Material Urea Supply Cut Off... Price Surges by $75 per Ton in a Week
Relatively Low Fertilizer Demand in Winter, but Concerns Over Prolonged Shortage
"Fertilizer Must Be Applied Before Rice Farming... Delays Could Lead to Sharp Decline in Yield and Quality"

[Sejong=Asia Economy Reporters Kim Hyunjung, Moon Chaeseok] "Urea supply has completely stopped. If this situation continues, we are considering halting the entire factory production. Currently, we are maintaining the factory's capacity by producing compound fertilizers using only about half the usual amount of urea, but we can only endure this for one to two months at most." (Fertilizer Company A)

"Until last week, we had about 300 tons of urea stock, but this week it is '0'. We are operating the factory by switching to compound fertilizers that do not use urea at all." (Fertilizer Company B)

The impact of China's urea export restrictions has extended to domestic fertilizer manufacturers, spreading concerns of a 'urea crisis' to farmers. Companies struggling to procure raw materials are urgently changing production items to cope, but if the situation prolongs, fertilizer supply could be disrupted starting from next spring's rice farming season. The Ministry of Agriculture, Food and Rural Affairs, the relevant authority, forecasts no major supply issues until February next year based on current stock levels, but has decided to hold a supply monitoring meeting chaired by the vice minister to review additional countermeasures.

According to the industry on the 9th, domestic small and medium fertilizer manufacturers such as Pungnong have practically stopped producing urea fertilizers. Although they have not completely shut down factories, they are minimizing urea input by focusing on compound fertilizers. A company official said, "It is difficult to disclose exact figures, but urea is practically at rock bottom."

Prices of imported fertilizer raw materials are skyrocketing. According to the Korea Fertilizer Association, as of the 4th, urea was priced at $975 per ton, up $75 from $900 on the 28th of last month, and 3.2 times higher than a year ago. Potassium chloride, known as a fertilizer raw material, rose $10 to $665 per ton compared to the previous week. Diammonium phosphate ($815) and ammonia ($725) surged $100 and $10 per ton respectively during the same period.

Companies are urgently seeking new sales channels. According to the association, markets outside China that the industry can consider include Qatar, Bahrain, Saudi Arabia, Indonesia, and Malaysia. Among these, Indonesia and Malaysia mainly conduct long-term contracts through state-owned enterprises and control private transactions, making Qatar in the Middle East virtually the only alternative.

The problem is that if urea fertilizer is not applied on time, crop yield and quality decline. Generally, land is thawed in February just before rice farming, and urea fertilizer is applied as base fertilizer beforehand. Farmers explain that delays in this process can adversely affect crop yield and quality. An industry official expressed concern, saying, "If urea fertilizer is not applied on time, most crops' yields could decrease by up to half, and rice in particular will suffer serious damage."

The Ministry of Agriculture, Food and Rural Affairs, considering the possibility of fertilizer price increases and supply instability, plans to hold a fertilizer supply status monitoring meeting chaired by Vice Minister Park Youngbeom this afternoon to discuss related matters. However, since fertilizer demand is concentrated in the farming season (March to May), demand is currently limited, and the government believes there will be no major problems with existing stock. While cautious about publicly disclosing detailed stock status due to concerns over panic buying, it is estimated that current stock can last until February next year considering average demand.

A ministry official said, "It is true that fertilizer supply conditions are worse than usual, but there is capacity to meet actual demand," adding, "Based on past seasonal sales volumes, current stock levels are sufficient until February next year." The official also added, "To alleviate psychological anxiety, we will start agricultural demand surveys through the Nonghyup earlier than usual and expedite annual contracts with fertilizer companies scheduled for the end of the year."

This content was produced with the assistance of AI translation services.