China tightens border inspections for fertilizer exports, sources say

China is stepping up customs inspections to enforce its new fertilizer export controls as gaps widen between domestic and international prices that have surged after disruptions linked to the closure of the Strait of Hormuz.

Exports of ammonium sulphate - one of China's largest fertilizer exports by volume, which was excluded from restrictions introduced in March - are now subject ‌to customs inspections, three ⁠fertiliser ⁠traders said, speaking on condition of anonymity given the sensitivity of the matter.

The crackdown started after customs officers in the eastern port city of Qingdao identified cases of exporters falsely declaring urea and potash fertilisers - whose export is restricted - as ammonium sulphate, two said.


"Our ammonium sulphate exports have recently seen a very high inspection rate because of this," said a trader whose company is involved ⁠in the ‌sector.

Qingdao's General Administration could not be reached outside business hours and China's General Administration of Customs in Beijing did not reply ⁠to faxed questions also sent after business hours. China is one of the world's top fertilizer exporters, shipping more than $13 billion last year, but tightly regulates exports to protect farmers. Last month Beijing restricted most fertiliser exports ahead of the spring planting season, with only a limited range of products - most notably ammonium sulphate - excluded.

Those bans have contributed to soaring international fertiliser prices triggered by the Iran war, which has disrupted flows through ‌the Strait of Hormuz - through which roughly a third of globally traded urea is shipped.

China's domestic urea prices remain well below global levels, supported by export restrictions ⁠and a coal-based production system, creating a wide price gap that would make urea exports highly profitable if they were permitted.

Urea exports are controlled by a quota system. Beijing typically waits to see if there is a surplus in May before assessing how much can be shipped abroad.

Last year, China exported 4.9 million tons of urea, somewhat below historical norms of 5 to 5.5 million tons which would typically account for around 10% of global exports, according to StoneX.