North Korea sees a decline in urea fertilizer imports from China
North Korean imports of urea fertilizer have recently declined, Daily NK has learned. This comes as South Korea experiences shortages of urea following a Chinese ban on its export.
North Korea is having trouble importing ammonia as well, with fertilizer factories in danger of suspending production. If North Korea cannot raise fertilizer production to normal levels, the country’s food shortages could worsen next year.
According to a Daily NK source in South Pyongan Province on Sunday, major fertilizer factories such as Namhung Youth Chemical Complex have sharply cut production due to shortages of imported raw materials like ammonia. If the raw material problems cannot be resolved swiftly, they will need to immediately suspend production.
Namhung Youth Chemical Complex is a leading North Korean petrochemicals factory in Anju’s Namhung area. It produces fibers, rubber and other petrochemical products, as well as urea and nitrogen fertilizers.
The Hungnam Fertilizer Complex, North Korea’s largest fertilizer factor, reportedly faces a similar situation. The plant produces urea fertilizer using ammonia.
Although North Korean fertilizer factories produce so-called “Juche fertilizer,” an urea-based fertilizer made from ammonia extracted from locally mined coal, it is expensive to produce and of low quality. Accordingly, North Korea mostly relies on imported fertilizer and fertilizer ingredients.
In particular, locals say the Namhung Youth Chemical Complex is in general distress, with an explosion caused by an overload in August resulting in damage to the facility.
North Korea’s current shortages of urea and ammonia are the result of Chinese export regulations. On Oct. 15, China mandated customs inspections, or CIQ, of urea exports, and in so doing practically banned their export.
China has been producing urea by extracting ammonia from coal. However, the country has moved to reduce coal production in line with eco-friendly energy policies. What’s more, trade with Mongolia, Indonesia and Russia has suffered due to COVID-19, aggravating the country’s coal shortage.
The suspension of coal imports from Australia due to political tensions with Canberra has had an impact on Chinese coal and power shortages as well.
While urea can be produced from ammonia extracted from natural gas, this is not only expensive, but China also uses most of its natural gas to combat power shortages. As a result, China has seen a drastic decrease in urea production.
The chaos in the urea market sparked by China has led to rising urea prices and fertilizer shortages in South Korea, too. Observers predict a number of problems as a result, including problems in operating diesel vehicles and rising prices for agricultural goods.
The South Korean government has responded to the urea supply emergency by diversifying its urea import sources, signing deals with overseas companies that can supply urea and other measures.
However, North Korea is completely dependent on China for imports of urea and cannot immediately diversify its sources. Accordingly, resolving issues pertaining to securing or producing fertilizer could prove difficult in the short term.
The source in South Pyongan Province said Namhung Youth Chemical Complex is more than 95% dependent on imported raw materials for fertilizer, and that if China were to suspend exports, North Korean fertilizer production would shut down. He warned that if the situation continues, most farmers will need to farm next year without fertilizer.
He further said there is already concern that if fertilizer production and imports sharply drop this year, the food situation could grow worse next year.
Kwon Tae-jin, director of the North Korea, Northeast Asia Research Center at the GS&J Institute and an expert on North Korean agriculture, said in a phone call with Daily NK that North Korea imported more fertilizer than last year, but it was still less than half a normal year’s amount. “Naturally, fertilizer shortages directly lead to falling harvests,” he said.
However, Kwon said North Korea is estimated to import half its fertilizer and domestically produce the other half. He added that because China unofficially provides a considerable amount of fertilizer for free, fertilizer imports from China “would not drop dramatically to zero, realistically speaking.”
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