China Uses Strategic Sulfur Reserves to Stabilize Fertilizer Market

In response to supply disruptions of sulfur caused by the armed conflict in the Middle East that began in late February and led to the closure of the Strait of Hormuz, the Chinese government is implementing emergency measures to support the stability of the agricultural sector. As a result, transportation costs and sulfur prices have significantly increased, posing a threat to the production of phosphate fertilizers, which are critically important for the country’s spring planting campaign.

This is reported by AgroReview

Challenges of Sulfur Imports and the Role of Strategic Reserves

China meets about 47% of its sulfur needs through imports, primarily from Gulf countries. Any disruptions to transport routes in this region directly affect domestic fertilizer production. To minimize negative impacts, the National Development and Reform Commission (NDRC) has announced priority supply of sulfur from strategic reserves to domestic fertilizer producers.

“This step will help maintain production stability and control prices amid geopolitical uncertainty.”

The use of strategic sulfur reserves is seen as a temporary buffer to prevent disruptions in phosphate fertilizer production and support the market in the short term.

Agricultural Ambitions and Long-Term Challenges

The issue of stable sulfur supply is particularly relevant against the backdrop of China’s ambitious plans to increase grain production by 50 million tons by 2026. Achieving this goal requires extensive use of fertilizers; however, raw material shortages and rising prices pose a serious challenge for the agricultural sector. Strategic sulfur reserves help mitigate risks in the short term but do not address the fundamental issue of import dependency.

The country’s long-term strategy aims for a grain output of 725 million tons by 2030. At the same time, dependence on sulfur imports, especially from the Gulf, and limited domestic production capacity make China’s agricultural system vulnerable to geopolitical shocks. The current drawdown of reserves reduces immediate risk but does not eliminate the structural shortage of raw materials.

The future effectiveness of using strategic reserves will depend on the duration of the conflict in the Middle East and the speed of restoring stable transport routes through the Strait of Hormuz. In the future, China will need to either increase its own sulfur production or diversify its imports to ensure food security and stabilize the fertilizer market.