China eases Urea export limits, helping global prices

China is set to loosen its restrictions on urea exports, a move that could lower global prices for this key fertilizer ingredient. The decision comes as tensions in the Middle East have driven up urea costs, with prices in New Orleans, a major benchmark, spiking over 15% last week due to production cuts in the region. Urea is a vital nitrogen fertilizer used worldwide to support food production.

Starting this month, Chinese companies will face fewer export limits, though they’ll still need to follow quotas and, in some cases, minimum price rules, according to sources familiar with the matter. Exports to India, a major urea buyer, will remain restricted. India has been working to rely less on imports, but strained relations with China since a 2020 border clash have complicated trade.

China’s Ministry of Commerce has not yet commented on the change. The news caused shares of Yara International ASA, a major fertilizer company in Norway, to drop by up to 3%. The easing of China’s export rules could help stabilize global fertilizer markets, which have been under pressure from supply shortages and geopolitical issues. This shift may bring relief to farmers worldwide who depend on affordable urea to grow crops, potentially easing concerns about rising food production costs.