China blocks urea exports to Korea

Urea solutions are on display at a supermarket in Seoul. [YONHAP]

Korea's urea supply chains face difficulties as China halted customs procedures for urea exports to Korea.

Despite government assurances that the urea-shortage crisis of 2021 won't repeat, concerns remain as diversification of urea imports has not been successful.

China's customs authorities blocked the export of Chinese urea to Korean companies but have yet to respond to Seoul's request for an explanation, the government and industry officials said on Sunday.

"We are convening a related emergency meeting and looking into the situation, but the Chinese government has not given its official position," a Finance Ministry official told Korean news agency Yonhap. "We are checking and monitoring our urea solution inventory."

A joint meeting involving the industry, finance and foreign ministries was held Thursday to discuss the issue, and another meeting is scheduled for Monday.

Sources said the government assumes the Chinese government's export restriction comes due to its own supply and demand, not as a formal export control measure.

Korea suffered major disruptions to its logistics networks in late 2021 after China restricted its urea exports amid a trade dispute with Australia.

Urea is a chemical compound used to produce fertilizer and diesel exhaust fluid for diesel engines.

China is the world's largest urea supplier. China's export curbs on urea solutions led to a massive supply shortage in Korea, taking a toll on diesel vehicle drivers.

Korea relies on China for urea supplies, with 91 percent of Korea's urea being imported from China as of October.

Korea's urea inventory is enough to last about three months, considering its planned imports from Vietnam, Japan and other countries excluding China.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]