NextFin News - A former World Bank president has called on China to release its massive strategic reserves of grain and fertilizer, arguing that Beijing’s current hoarding is intensifying a global supply crisis triggered by the ongoing conflict in Iran and the closure of the Strait of Hormuz. David Malpass, who led the World Bank from 2019 to 2023 and previously served as a senior Treasury official under U.S. President Trump, stated that China’s decision to halt fertilizer exports since March has left global markets in a precarious state as spring planting begins in the Northern Hemisphere.
Malpass, known for his "America First" economic leanings and a long-standing skepticism toward China’s status as a "developing nation," made these remarks on the eve of a high-stakes summit between U.S. President Trump and Chinese leadership in Beijing. His position reflects a hawkish wing of U.S. economic policy that views China’s state-led stockpiling not as a defensive measure for food security, but as a market-distorting tool that penalizes smaller, import-dependent economies. Malpass argued that as the world’s second-largest economy, China no longer has a credible claim to the preferential treatment afforded to developing countries under World Trade Organization rules.
The urgency of the appeal is underscored by the volatility in global input markets. According to data from Trading Economics, Urea was trading at $547.50 per metric ton as of May 8, 2026. While this represents a retreat from spikes earlier in the spring, prices remain more than 15% higher than a year ago, reflecting the severe disruption of nitrogen fertilizer shipments from the Middle East. China, which typically accounts for roughly one-third of global nitrogen fertilizer production, has effectively locked its domestic supply behind export bans to insulate its own agricultural sector from the rising costs of the Iran conflict.
However, the view that China should "stop hoarding" is far from a consensus among global agricultural analysts. Many market observers point out that China’s grain reserves—estimated by the USDA to include beginning stocks of over 190 million metric tons of corn for the 2025/26 marketing year—are a rational response to a decade of increasing geopolitical instability. From Beijing’s perspective, maintaining a "buffer" is a matter of national survival, especially as U.S. President Trump’s administration continues to use trade and tariffs as primary levers of foreign policy. Critics of the Malpass view suggest that asking China to deplete its reserves during a period of active maritime blockades in the Middle East is a non-starter for Chinese policymakers.
The deadlock in the Strait of Hormuz has created a unique economic paradox for Beijing. While China benefits from its role as a dominant global shipper and container owner, the disruption of energy and fertilizer flows through the Persian Gulf threatens its industrial base. Malpass noted that China would be a "big loser" if Iran maintained control over the waterway, suggesting that Beijing’s economic interests should theoretically align with the U.S. demand for a resolution to the conflict. Yet, the current strategy of the Chinese government appears to be one of "fortress economics"—securing internal supplies first and waiting out the external volatility.
The outcome of this supply-side tension will likely hinge on the upcoming bilateral talks in Beijing. If the U.S. President can secure a commitment from China to resume fertilizer exports or moderate its grain purchases, it could provide a significant disinflationary impulse to global food prices. Without such a breakthrough, the "hoarding" that Malpass decries is likely to continue, as nations across the globe prioritize domestic stability over the efficiency of the international trade system. The resilience of the U.S. economy, evidenced by robust jobs data, provides the Trump administration with some leverage, but the immediate reality for global farmers remains one of high costs and restricted access to essential inputs.
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