Covid-19 restrictions in China are delaying fertiliser supplies to the country's northeastern breadbasket just a month before spring planting, putting this year's corn and soybean crops at jeopardy if not resolved soon.
Fertiliser is normally made in early April and applied to fields later that month during planting. However, China's largest Covid outbreak since the pandemic began two years ago has prompted severe curbs on people and material transportation, significantly slowing supplies.
Rules requiring truck drivers to take Covid tests every 24 hours, the requirement for special passes to distribute commodities, and factory suspensions due to local Covid cases, according to fertiliser manufacturers, dealers, analysts, and associations, are all contributing to tight supply.
"Production of nitrogen fertiliser and fertiliser preparation for spring planting has been greatly affected," the China Nitrogen Fertilizer Industry Association said this week.
Jilin, China's second-largest corn-growing province, is among the hardest afflicted, with the local government banning cross-border and intra-provincial mobility beginning March 14 as Covid cases reached tens of thousands per day.
"Fertiliser supply here couldn't be tighter," said a Jilin-based dealer surnamed Yan, who is short more than 2,000 tonnes of the critical crop nutrient for his customers.
The backlog comes on top of record fertiliser prices, which have been driven up by strong global demand, rising energy costs, and sanctions on Russia and Belarus, two major producers.
Despite Beijing's efforts to keep prices low, China's wholesale fertiliser index (CFCI) is up 40 per cent from a year earlier.
This has deterred many dealers from stocking up in recent months, leaving them shorthanded during their strongest selling season.
Yao, a Liaoning dealer, said he's short approximately a third of his requirements.
The transportation restrictions are particularly troublesome for the northeast, which lacks sufficient local fertiliser production and must rely on deliveries from neighbouring provinces.
The northeastern provinces of Heilongjiang, Jilin, and Liaoning, as well as the Inner Mongolia region, produce more than 40% of China's maize and half of its soybeans.
Corn and soybean prices are nearing all-time highs.
Even after receiving roughly 1,000 "green cards" for trucks, top fertiliser maker Sinofert Holdings still had about 80,000-100,000 tonnes of product waiting to be dispatched, executive director Ma Yue told reporters on an earnings call last week.
It takes time to process special passes for delivering important products, and they must be renewed on a regular basis. According to dealers, finding drivers willing to work under the limits has become increasingly difficult.
The difficulties arise despite Beijing's repeated appeals for all-out efforts to ensure successful harvests in the face of global food security worries.
Despite the problems, fertiliser had reached 68.8 per cent of Jilin's farming families by Wednesday, according to the government publication the Jilin Daily, which also stated that the supply of farm products was "orderly and consistent."
(Source:www.reuters.com)
Fertiliser is normally made in early April and applied to fields later that month during planting. However, China's largest Covid outbreak since the pandemic began two years ago has prompted severe curbs on people and material transportation, significantly slowing supplies.
Rules requiring truck drivers to take Covid tests every 24 hours, the requirement for special passes to distribute commodities, and factory suspensions due to local Covid cases, according to fertiliser manufacturers, dealers, analysts, and associations, are all contributing to tight supply.
"Production of nitrogen fertiliser and fertiliser preparation for spring planting has been greatly affected," the China Nitrogen Fertilizer Industry Association said this week.
Jilin, China's second-largest corn-growing province, is among the hardest afflicted, with the local government banning cross-border and intra-provincial mobility beginning March 14 as Covid cases reached tens of thousands per day.
"Fertiliser supply here couldn't be tighter," said a Jilin-based dealer surnamed Yan, who is short more than 2,000 tonnes of the critical crop nutrient for his customers.
The backlog comes on top of record fertiliser prices, which have been driven up by strong global demand, rising energy costs, and sanctions on Russia and Belarus, two major producers.
Despite Beijing's efforts to keep prices low, China's wholesale fertiliser index (CFCI) is up 40 per cent from a year earlier.
This has deterred many dealers from stocking up in recent months, leaving them shorthanded during their strongest selling season.
Yao, a Liaoning dealer, said he's short approximately a third of his requirements.
The transportation restrictions are particularly troublesome for the northeast, which lacks sufficient local fertiliser production and must rely on deliveries from neighbouring provinces.
The northeastern provinces of Heilongjiang, Jilin, and Liaoning, as well as the Inner Mongolia region, produce more than 40% of China's maize and half of its soybeans.
Corn and soybean prices are nearing all-time highs.
Even after receiving roughly 1,000 "green cards" for trucks, top fertiliser maker Sinofert Holdings still had about 80,000-100,000 tonnes of product waiting to be dispatched, executive director Ma Yue told reporters on an earnings call last week.
It takes time to process special passes for delivering important products, and they must be renewed on a regular basis. According to dealers, finding drivers willing to work under the limits has become increasingly difficult.
The difficulties arise despite Beijing's repeated appeals for all-out efforts to ensure successful harvests in the face of global food security worries.
Despite the problems, fertiliser had reached 68.8 per cent of Jilin's farming families by Wednesday, according to the government publication the Jilin Daily, which also stated that the supply of farm products was "orderly and consistent."
(Source:www.reuters.com)
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