Korea has taken measures to secure a stockpile of urea for more than six months, responding to increasing apprehensions about its supply following China's suspension of urea shipments, as announced by the finance ministry on Friday.

In early December, China halted customs procedures for urea shipments to Korea. While Seoul officials have characterized this move as an outcome of China's domestic supply constraints rather than a formal export curb, it has triggered concerns in Korea, given China's status as the world's largest producer of urea.

Urea, a nitrogen compound, serves multiple purposes, including emission reduction in diesel cars and the production of agricultural fertilizers. Recognizing the potential impact of China's export suspension on its domestic supply, Korea has proactively addressed this challenge by securing a substantial urea inventory to last for over six months.

Earlier this week, Seoul made the strategic decision to extend the tariff-rate quota system on urea, a move slated to persist through the entirety of the following year. This extension comes in response to the escalating risks in the supply chain triggered by Beijing's export restrictions on urea. Originally, the quota system on urea was set to conclude at the end of the current year.

The recent export constraints from China have reignited concerns about a potential recurrence of a supply chain crisis. Korea experienced significant disruptions to urea supplies in 2021 due to China's export restrictions, prompting the government to take proactive measures to mitigate similar risks in the current scenario.

Government data reveals that Korea has been heavily reliant on China for urea imports, particularly for industrial purposes. This year, over 90 percent of Korea's urea for industrial use was imported from China, a notable increase from 71.8 percent the previous year. Recognizing the vulnerability associated with such a high dependence on a single source, the government has been actively encouraging businesses to diversify their import channels for urea.

The decision to secure a substantial urea inventory for more than six months aligns with Korea's commitment to safeguarding its supply chain resilience in the face of external uncertainties. By extending the tariff-rate quota system, the government aims to provide a buffer against potential disruptions, thereby ensuring a stable and secure urea supply for domestic industries. As the situation unfolds, stakeholders will closely monitor how these strategic measures contribute to mitigating the impact of China's export restrictions on urea and fortifying Korea's urea supply chain resilience.