Gov't boosts reserves to appease public jitters over urea shortage

The government is urging the public not to engage in panic buying of urea, saying it has secured more than four months’ worth of reserves of the organic compound after China’s latest decision to curb exports to Korea.

According to the Ministry of Trade, Industry and Energy, Sunday, a Korean company recently signed a contract to import urea for vehicles from Vietnam. This increases the urea reserve here to 4.3 months of use from 3.7 months.

“We have secured 4.3 months’ worth of urea reserves, and a total of 5,000 tons of Vietnamese urea will be shipped to Korea no later than the end of next week,” Vice Minister of Trade, Industry and Energy Chang Young-jin said Sunday during a meeting with a gas station chief in Seoul.

Urea is used to reduce emissions from diesel cars and produce agricultural fertilizer.

“About 97 percent of gas stations nationwide are selling urea without any problems,” he said. “We have set up a pan-governmental system to thoroughly monitor urea retail conditions, and will take measures to promptly supply urea to gas stations with low reserves.”

The message is aimed at appeasing deteriorating public sentiment for the government’s failure to establish a stable supply chain of urea here after China recently decided to stop urea exports to Korea. Two years earlier, a similar incident took place, pushing diesel vehicle owners to join a buying spree of urea.

This was sparked by Korea’s heavy reliance on China for urea. Korea’s reliance on China for industrial urea used for vehicles tops 90 percent. The figure fell to around 70 percent in 2021 when Korea diversified import channels after suffering a similar setback. But the price competitiveness of Chinese urea ended up increasing Korea’s reliance, raising calls for the government to build a mid- to longer-term plan to prevent the recurrence of such incidents.