DAP is the world's most widely used and traded phosphate fertilizer product. China accounts for more than one-third of total world trade in DAP, with almost all of the imports purchased from U.S. producers. The outlook for China's phosphate use remains strong. Chinese phosphate consumption is expected to grow from approximately 8 million metric tons today to 11 or 12 million metric tons by the year 2005. The outlook for increased U.S. DAP exports to China also looks positive, but any Chinese trade restrictions on DAP imports would have a devastating impact on these prospects and on the entire U.S. fertilizer industry.
China is also the world's largest consumer of urea.
Urea is a dry, solid product and is by far the world's most important and widely used nitrogen fertilizer product. To put the role of China's urea market into perspective, China accounts for one-fourth of total world urea fertilizer demand and, up until 1997, China was the world's dominant importer of urea accounting for as much as 40 percent of total world trade. Furthermore, urea is the largest and one of the fastest growing nitrogen fertilizer products used in China. From 1981 to 1996, urea demand in China grew at an average annual rate of 7.0 percent, with the total volume increasing from 9.6 million metric tons in 1981 to 26.5 million in 1996. The Closing of China's Urea Market in 1997 In mid-1997, the Chinese government made a decision to bolster the domestic Chinese urea industry and completely closed its borders to urea imports by refusing to issue new import licenses for urea.