Spiked potash price threatens spring planting in China
Potash is said to be in short supply in China and farmers are having difficulty sourcing the fertilizer as prices jumped 71% over the past year.
In 2020, China imported just over 9 million ton of potassic fertilizers, account for 53% of the country’s needs. The top three suppliers of potash to China are Canada, Russia, and Belarus.
China’s fertilizer imports have been implicated by geopolitical tensions, as Belarusian exports need to transit through Lithuania to reach ports and be loaded onto vessels going to China.
At the start of this month, Lithuania began blocking Belarusian rail freight traffic due to western sanction on Belarus, which subsequently affected exports to China.
Lithuania and China have also been in an escalating diplomatic row with China recently banning agricultural imports from the country.
Urea prices have fallen recently. Futures for May delivery fell nearly 2.5% today to their lowest level since January 6 this year. There are expectations that as the winter ends, heating demand for natural gas and coal will fall which should free up more supplies for fertilizer producers.
State wheat sales weak amid high price, imported corn auction robust
China’s state-owned stockpiler Sinograin offered nearly 18,900 tons of national wheat reserves for sale in north-eastern province Heilongjiang on Tuesday but failed to attract any demand due to strong price.
Domestic wheat prices in China have been strengthening since mid-2020 and has hit almost 3,000 yuan/ton (US$473/ton) this month, up 11% year on year, thanks to better demand in animal feed and a changing consumer diet.
Another key factor behind high wheat price in China is potential crop loss due to poor weather condition and the reduced use of fertilizer.
However, the concern of crop loss has been partially offset by snowfalls in northern China that improved soil condition and limited the damage from pests.
Recent plantings of winter wheat crops in China are said to have grown smoothly, according to local Chinese newswire Economic Daily that interviewed grain trading houses in the north.
In contrast to poor wheat sales, the auction of imported corn reserves gained strong buying interest with more than 54,000 tons sold out of an offer of 61,885 tons.
Corn prices in China are 4% off the recent high in May last year but continued to hover at the level of 2,600 yuan/ton (US$410/ton).
China bans poultry imports from Canada over bird flu concern
China has suspended all poultry imports from Canada starting this week as concerns of bird flu mounted after a Canadian turkey farm reported H5N1 bird flu outbreaks.
The Chinese customs will stop issuing clearance permits to any poultry exporters in Canada and will cancel all existing permits previously granted to exporters, China’s Administration of Customs said recently.
This act is aimed to “protect the husbandry industry in the country and prevent the disease from entering”, said customs.
Starting from this week, any shipments of Canadian poultry and its products that have sailed after this Monday will be returned or destroyed.
China imported nearly 1.5 million tons of chicken last year, accounting for almost 15% of China’s total meat imports last year.