Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Gov't criticized for failing to lower dependence on China for urea
A sign at a gas station in Seoul shows that it limits the sale of urea water to one barrel, Monday, as the Chinese government halted the clearance of industrial urea exports to Korea. Yonhap
By Baek Byung-yeul
The government is facing growing criticism for not doing enough to secure a stable supply of urea, following China's recent ban on exports of the industrial product to Korea, which has reignited concerns over a possible repeat of the urea shortage crisis two years ago, according to industry officials and experts, Tuesday.
Even though the government said it has three months’ worth of reserves and plans to diversify supply sources, critics expressed skepticism about whether the country can ensure a smooth supply of urea.
"China has a significantly superior price competitiveness for urea products compared to other countries. The government said it would overcome this through diversification of supply sources, but it does not seem easy to overcome China in the short term," Yoo Jeong-ho, a professor at the division of international commerce at Pukyong National University, said.
The professor said the government has always been aware that it should escape from high dependence on China, but the reason it couldn’t was pricing.
“The reason domestic companies do not produce urea is low profitability. Efforts to overcome the excessive dependence on China for urea should be made over a long period. Rather than competing with China, we should continue to maintain a cooperative relationship as we do now," the professor said.
Urea is essential for reducing emissions from diesel vehicles and producing agricultural fertilizer when mixed with water.
However, China Customs, which is equivalent to the Korea Customs Service, suddenly put on hold the exports of urea that a Chinese company was trying to ship to a Korean company, on Nov. 30, according to the government.
On Monday, The Ministry of Trade, Industry and Energy explained that the delay in urea customs clearance in China is not due to political reasons, but stems from increased demand there, adding it conveyed its concerns to China and requested a swift resumption of exports.
In October 2021, Korea experienced a urea shortage when China controlled exports. Since then, Korea pursued diversification of imports, reducing its dependence on China from 71.2 percent in 2021 to 66.5 percent last year, according to government data.
However, this year, the dependence on China has risen again to over 90 percent. Currently, Korea has secured about three months' worth of urea reserves.
Experts also said that such problems may not be limited to urea as China has a high market share in many mineral resources.
"The urea issue can be solved by the government’s efforts to diversify its sources of supply from Southeast Asian countries. However, such problems are not only applicable to urea,” an official from a local battery industry said on condition of anonymity.
“China has controlled the export of graphite since December 1. The domestic industry has reserves of graphite, but it needs a solution for this as well,” the official added.