China restricts fertilizer exports, tightening global supply amid market disruptions

China has restricted fertilizer exports to protect its domestic market, adding further pressure to global supply chains already affected by disruptions linked to the U.S.-Israeli war on Iran. China is one of the world’s largest fertilizer exporters, shipping more than USD 13 billion worth last year. The country has a history of controlling exports to stabilize domestic prices for farmers.

According to industry sources, shipments through the Strait of Hormuz, which account for roughly one-third of global sea-borne fertilizer supply, have been disrupted. In mid-March, China banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties. The measures, although not formally announced, were also reported by Bloomberg. 
 

Export restrictions tighten global supply

Additional restrictions and quotas on urea exports mean that only limited products, such as ammonium sulphate, remain available for export. Industry estimates suggest that between half and three quarters of China’s fertilizer exports in 2024 are now restricted, potentially affecting up to 40 million metric tons.

Matthew Biggin, Senior Commodities Analyst at BMI:

"This pattern is consistent: China restricts supplies rather than coming to the rescue during global tightness. The export restrictions exist because of their tight domestic balance – they are prioritising food security and insulating their domestic market from price shocks."

These measures follow broader government actions to secure domestic supply, including recent restrictions on refined fuel exports, as countries respond to supply chain disruptions and rising input costs. International urea prices have increased by approximately 40 percent compared to pre-war levels, while urea futures in China have reached near a 10-month high.
 

Global markets remain dependent on China

Several countries remain highly dependent on Chinese fertilizer exports. In 2024, China supplied around 20 percent of fertilizer imports to Brazil, Indonesia and Thailand, and about one-third to Malaysia and New Zealand. India sourced approximately 16 percent of its fertilizer imports from China. Reuters analysis indicates that between 50 and 80 percent of these exports are now restricted.

An official from a New Delhi-based fertilizer company:

"Buyers were hoping China would step in and fill the supply gap, but this decision will only tighten supplies further."

India, which imported more than 40 percent of its urea and DAP fertilizer from the Middle East last year, has requested China to issue export quotas for urea.

 

Uncertainty over timeline for easing restrictions

The Philippines reported that China had indicated fertilizer exports would not be restricted, although Chinese authorities have not confirmed this publicly. Requests for comment from government agencies, including the Ministry of Commerce and the National Development and Reform Commission, have not yet received responses.

At an industry conference in Shanghai, market participants indicated that restrictions are unlikely to be lifted before August, following the peak export period from June to August.

Caitlin Welsh, Director at the Center for Strategic and International Studies:

"Most analysts expect China to continue extending export bans, as the country remains cautious about any measures that could increase domestic grain and feed prices."