Fertilizer industry assesses India-China tensions

: Fertilizers
20/06/30

Growing tensions between the Indian and Chinese governments have resulted in delays to the discharging of a phosphates vessel this week, prompting concern from some fertilizer industry participants.

The relationship between the two nations has increasingly soured following military clashes earlier this month, resulting in prohibitive measures taken by the Indian government. India has banned dozens of Chinese mobile apps today, and there are increasing reports of delays of customs clearance for Chinese goods.

A vessel loaded with Chinese phosphates, the Princess Coco, has experienced delays discharging at Mumbai, following its arrival and berthing on 23 June, having left Shanghai on 4 June. The vessel discharged 700t of MAP, but this was suspended on 24 June and the vessel has since remained at anchorage. The trading firm that fixed the vessel to ship the phosphates has attributed the delay to a customs issue.

The delays to the vessel's discharge has prompted a variety of responses from some participants, with a major southern Chinese phosphates producer now very concerned by the situation. A China-based trading firm will refrain from shipping any phosphates on this trade route for the time being, partly given the lack of clarity.

Latest tender highlights continued mutual dependence

But some fertilizer industry participants have dismissed the measures as posturing, citing India's reliance on Chinese fertilizers (see chart).

The overall importance of fertilizers to India's agricultural industry was emphasised by governmental measures at the end of March, designating the supply of fertilizers as an essential service in the wake of the Covid-19 pandemic.

State-owned Indian importer RCF's issuance of awards under a major urea purchase tender today, in which Chinese product will feature, highlights the mutual dependence of fertilizer trade between the two nations.

The India-China trade route is of particular importance for fertilizer products, notably Chinese exports of urea and DAP, with India the largest global importer. Suppliers shipped 3.25mn t of urea from Chinese ports last year, marking the highest share of the Indian urea import market, trade data show. In terms of phosphates, Chinese DAP producers accounted for 37pc, or 2.15mn t, of total Indian imports in 2019, Argus data show. Chinese producers dominated DAP supply into India in 2012-18.

The trade route is also crucial for India-origin fertilizers, with China the primary destination for Indian sulphur. Indian suppliers increased sulphur shipments to 632,000t to China in 2019, accounting for 94pc of all Indian exports.

By Harry Minihan

Indian imports of urea, DAP and MAP by origin in 2019

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US-Belarus potash trade may soften MOP pricing outlook

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US-Belarus potash trade may soften MOP pricing outlook

London, 15 December (Argus) — Potash trade between the US and Belarus is set to be reinstated after an absence of almost four years, following the lifting of US sanctions on Belarusian potash on 13 December with immediate effect — a move that could soften the outlook for global MOP prices as supply options increase. The relationship between the US and Belarus had started to ease earlier this year when Belarus agreed to release 52 political detainees from its prisons in exchange for the lifting of some sanctions on Belarusian flagship airline Belavia in September. This limited rapprochement generated talk among market participants of the possibility of a further lifting of US sanctions on Belarus, which could affect Belarusian potash. US sanctions on Belarusian potash , which is produced by state-owned Belaruskali and marketed by BPC, have been in place since 2021. But the announcement over the weekend has largely caught the market by surprise. 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Belarusian MOP has not touched US soil since February 2022, but in 2017-21 an average of 635,000 t/yr of Belarusian MOP was brought into the country. This policy change also comes just days after US president Donald Trump claimed he could impose severe tariffs on Canadian fertilizer imports, and the return of trade with Belarus may be used as leverage for the US in the current tariff war between the two countries. But the US will not be able to replace all of the 11mn-12mn t/yr of Canadian potash it needs with Belarusian product. It is also in line with Trump's strategy to secure the country's critical minerals needs. Trump included potash in the administration's list of American critical minerals this year and ordered the US government to fast-track permit reviews for critical minerals projects . The importance of potash was also highlighted when the White House spared a number of potassium-based fertilizer products — MOP, SOP, NOP, NPK and magnesium sulphate — from a raft of tariffs imposed earlier this year. In the US domestic market, traders appear largely unfazed by the new development. There have been strong MOP imports this year and there are currently healthy inventories of MOP across the Corn Belt. Additional volumes from Belarus could oversupply the market, pressuring prices downwards at a time when potash is already the most affordable nutrient domestically. 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Without access to the US and EU markets, Belarus has leaned heavily on markets such as Brazil, China and southeast Asia, often pricing aggressively to maintain market share. The reopening of US trade offers a chance to reduce dependence on these regions. The lifting of the sanctions will also make it significantly easier for companies to trade Belarusian potash around the world, except in the EU and the UK, where sanctions remain on Belarus. Importers that had previously stopped taking Belarusian MOP may now be open to trading with Belarus again. By having an additional supply option, buyers may find they have a stronger negotiating position with existing suppliers, which could put downward pressure on prices. Conversely, markets where Belarus has a strong presence could see a reduction of Belarusian volumes if product shifts toward the US, potentially making those regions less competitive. The policy change also comes at a time when Belarusian MOP capacity is increasing capacity, with the 2mn t/yr Nezhinsky MOP project scheduled for commissioning in the second quarter of 2026, and underscores Belarus' commitment to continue growing its footprint in the global potash market. By Julia Campbell and Taylor Zavala Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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