Global urea market insights.

26^th November 2025

The global urea market continues to experience volatility, and this has direct implications for Australian grains producers. Urea, a key nitrogen fertiliser, is crucial for crop production, and its supply chain is currently under strain due to various global factors.

Global urea supplies are fragile, with several key exporters like China, Iran, Egypt, and Europe facing production issues. China, which usually accounts for 8% of global urea exports, has drastically reduced its exports to lower domestic prices. This has created uncertainty in the market, as it is unclear when China will resume its usual export levels. Similarly, Iran's geopolitical instability and natural gas issues have led to reduced production, adding further risk to the market 1. Egypt, facing gas supply issues, and Europe, dealing with elevated gas prices and new regulations, are also contributing to the tight supply situation 1.

For Australian farmers, the impact is twofold. Firstly, the reliance on imports makes Australia particularly vulnerable to these global supply disruptions. In 2024, Australia imported 3.85 million tonnes of urea, representing over 90% of its usage. The weak Australian dollar further exacerbates the situation, making imports more expensive. With the US dollar strengthening, the cost of urea for Australian farmers is likely to remain high throughout 2025.

Despite some planned projects to increase domestic urea production, Australia is unlikely to significantly reduce its reliance on imports in the near future. The economics of internal shipping versus international exports make it more viable for producers to export rather than supply domestically. Additionally, while high prices may stimulate production growth globally, the overall tight supply outlook means that prices are expected to remain elevated.