The main reason for the shortage of urea water in Korea is the internal situation in China, the main supply source, and it is analyzed that it is partly connected with international politics and abnormal climate.



As for urea, a raw material for urea water, Chinese products account for about two-thirds of domestic imports.



According to KOTRA, China, the world's largest producer and exporter of urea, supplies about 5 million tons of urea to the global market each year.



Korea is China's second largest urea export destination after India. From January to September this year, China's urea exports to Korea amounted to 564,000 tons (up 40.2%), accounting for 14% of China's total urea exports.



Under this circumstance, the General Administration of Customs (Customs Administration) of China changed the export quarantine management method for 29 types of fertilizer items on the 11th of last month, and 29 types of fertilizers including urea, potassium fertilizer, and phosphate fertilizer that could be exported without separate quarantine or inspection Items must be quarantined from October 15th.



KOTRA analyzed that this is interpreted as an export restriction measure to curb fertilizer exports amid China's fertilizer shortage and to supply them preferentially to the domestic market.



In addition, China's fertilizer shortage is linked to the electricity shortage that China is currently experiencing seriously.



The sharp rise in prices of natural gas, sulfur, and coal, the main raw materials for chemical fertilizer production, has continued, and the recent power shortage has resulted in a contraction in the production of chemical fertilizers and urea and disruptions in supply.



Urea is extracted from coal or natural gas, and it is analyzed that the emergency in securing fuel sources such as coal ahead of the heating season is not related to the contraction in urea production as the electricity shortage in China became serious from mid-September.



The utilization rate of urea production in China in the second week of October was 67.24%, down 5.6 percentage points from the same period last year, KOTRA reported.



In the midst of this, as international fertilizer and urea prices soared, China's exports of related products surged.



In the end, as winter wheat is ready to grow, the Chinese government is interpreted as controlling the export of fertilizer items in order to catch the rising price of chemical fertilizers, ensure sufficient fertilizer supply in China, and inject coal in large quantities to solve the electricity shortage.



If we take another step further from China's shortage of fertilizer, coal and electricity, it will also lead to international politics and climate change.



China's cessation of imports of Australian coal amid the diplomatic conflict with Australia, which arose in the context of the US-China strategic competition, may have played a part, though not a large proportion.



China, which was very dissatisfied with Australia, which was on the side of the United States in the midst of the US-China competition, launched an all-round trade retaliation against Australia in April last year when Australian Prime Minister Scott Morrison emphasized the need for an international investigation into the source of the coronavirus. Stopped imports of Australian coal.



Australia's share of China's coal imports before the cessation of imports was about 25%, but it is difficult to say that it is a decisive amount because Australia's share in China's total coal consumption is about 2%.



However, it is known that China is having a lot of difficulty in finding high-quality substitutes for Australian products amid a surge in global raw material prices.



In addition, it is analyzed that the sudden fall flood that struck Shaanxi Province, China's major coal producing region last month, caused some 20 local coal mines to temporarily stop production, which is also analyzed to have affected China's coal supply and demand shortage.



Meanwhile, KOTRA predicted in a report from China on the 1st that it is concerned that the export restrictions will continue for a while if the supply of fertilizers and urea in China does not improve.



(Photo = Yonhap News)

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