UPDATE 2-China releases fertiliser stocks for spring, more expected

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BEIJING, March 15 (Reuters) - China has begun the annual release of fertilisers to the market ahead of spring planting, its state planner said late on Monday, ensuring sufficient supplies to help it meet its grain targets.

More than 3 million tonnes will be issued during the key spring ploughing period, and the government will monitor the market closely to ensure stable supply and prices, said the National Development and Reform Committee in a statement.

NDRC has implemented a fertiliser reserve scheme since the 2004-2005 crop year, with volumes released depending on the market situation.

Beijing is however also expected to release fertiliser for the summer growing period for the first time ever this year, said Gavin Ju, analyst at CRU, underlining the concern about soaring global prices and tight supplies.

A tender for a temporary fertilizer reserve for summer application including urea, diammonium phosphate (DAP) and NPK was issued in December, and will be released from June, said Ju.

Fertiliser prices globally have surged since last year, partly due to strong demand as well as high energy costs, and they are set to climb further due to Russia’s invasion of Ukraine.

A major producer, Russia has temporarily halted fertiliser exports.

China, also a major producer, had already announced curbs on exports last year to help tame runaway prices.

“It is expected that the export curbs by way of export inspection certificate will last at least until after the end of summer application in July,” said Ju.

Benchmark Zhengzhou urea futures that reached a record high of 3,342 yuan ($525.46) a tonne in mid-October fell to around 2,200 yuan after Beijing launched an investigation into the market and imposed restrictions on exports.

China’s fertiliser output edged up 0.8% to 54.46 million tonnes in 2021, while exports plummeted 42% from a year ago.

Urea prices last week rose to 2,782 yuan a tonne following the surge in global energy prices including natural gas and coal, the feedstock for fertiliser production.

A Russian fertiliser billionaire warned on Monday that a global food crisis is looming unless the war in Ukraine is stopped because fertiliser prices are soaring so fast that many farmers can no longer afford soil nutrients.

$1 = 6.3602 Chinese yuan renminbi Reporting by Muyu Xu and Emily Chow. Writing by Dominique Patton; Editing by Toby Chopra