Panic buying as S.Korea limits urea supply

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Days after flying a military oil tanker to Australia to airlift 27,000 litres of urea, used in diesel vehicles and factories to cut emissions, South Korea has started rationing the solution amid an acute shortage.

The scarcity threatens to halt transport and industry in the Asian nation.

Passenger vehicle drivers will be given a 10-litre limit and commercial vehicle drivers 30 litres, with all resale banned under a set of measures that will be in effect until the end of the year, South Korea's trade ministry said on Thursday.

Producers and sellers of the solution are required to report all import, production, sale and inventory data to the government daily, the ministry said.

Approximately two million diesel vehicles, mostly cargo trucks but also passenger vehicles, are required by government to use the additive, according to industry experts.

At a special cabinet meeting to review response to the issue that has sparked panic buying among drivers and long lines at sellers that still had stock, Prime Minister Kim Boo-kyum apologised for the failure to anticipate the shortage.

"I express my deepest apologies for causing such inconvenience and concerns," he said, adding it will be some time before supply can be normalised.

Diesel vehicle drivers started panic buying urea after China last month introduced a new export requirement, effectively halting exports in order to boost supplies to the domestic market.

Nearly 97 per cent of South Korea's urea imports came from China between January and September, the trade ministry said.

South Korea has scrambled to secure supply, this week flying a military oil tanker to Australia, diversifying the sourcing to other countries and expediting urea imports from China, but industry officials say the measures remain a temporary fix at best.

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