To mitigate the impact of disruptions, the National Development and Reform Commission (NDRC) has announced priority supply of sulphur from strategic reserves to fertilizer producers. This will help maintain production stability and control prices amid geopolitical uncertainty. The strategic sale of sulphur reserves is a tactical decision to ensure production continuity and support the fertilizer market, ukragroconsult writes.
This issue becomes especially acute against the background of China’s ambitious agricultural plans for 2026: the government aims to increase grain production by 50 million tons. To achieve this goal, the active use of fertilizers is necessary, but the growth and scarcity of raw materials create a direct conflict between economic realities and political goals. Strategic sulphur reserves are designed to solve this problem in the short term.
China’s long-term strategy calls for increasing grain yields and production to 725 million tons by 2030, but this creates a structural dependence on imported inputs. Raw material dependence on the Persian Gulf and limited domestic sulfur production capacity make the system vulnerable to geopolitical shocks. The current inventory sell-off only reduces the immediate risk, but does not address the fundamental problem of raw material shortages.
The effectiveness of the tactical buffer depends on the duration of the conflict in the Middle East and the speed of normalization of transport routes through the Strait of Hormuz. The fertilizer market, the pace of adjustment and the level of demand will be key indicators of the stability of the system. In the long term, China will have to either develop its own sulfur production or diversify import sources to guarantee the sustainability of food security.
