29-04-2026
Urea is the preferred source of Nitrogen among all commercial Nitrogen fertilizers because of its high nitrogen content approximately 46% and low transportation and storage costs compared to other nitrogen fertilizers. Urea quickly turns into ammonium, which is available for plant uptake, within 48 hours after application. Farmers like using urea because of its high solubility and efficiency; however, appropriate and careful application will maximize the benefits of urea.
The value of the urea market was approximately $79.7 billion in 2025, with a projected growth to $104.8 billion in 2034, representing steady long-term demand 3.9% CAGR as a result of dietary requirements of the Agricultural industry and increasing demand for food globally will continue to propel the growth of the urea market.
Natural gas prices will remain high and volatile because of the risk that the Middle East conflict could disrupt gas supply routes and case gas shipments to be disrupted from the Middle East. Because natural gas is the main input cost for the production of urea fertilizers, this leads to rising fertilizer production costs globally.
Demand and supply outlook
The Asia Pacific region has the highest percentage of market share 61% due to the high level of fertilizer consumption in countries such as China and India. Because of its high nitrogen content and ability to enhance crop production, urea serves primarily in an agricultural capacity to provide crops with nitrogen-rich fertilizer, while lower-demand categories use urea mainly to provide increased nitrogen for animal feed, chemicals, and pollution control.
India is still experiencing high levels of demand for fertilizers due to government incentives encouraging fertilizer utilization; however, China remains the current leader in both production and usage of urea and now has a rapid growth rate for urea consumption in feed. Unlike Europe, which mainly depends on importation from Asia due to strict emissions regulations on vehicles, the United States continues to see stable demands from industrial applications and agricultural applications.
29-04-2026
The Middle East and Africa produce urea in large quantities because they have low-cost rawmaterial resources available and a high demand for urea from the chemical industry as well as from other industries. Latin America will continue to import urea, but its potential for growth in urea production locally is also quite large.
The Strait of Hormuz is experiencing difficulties and there are few cargo vessels that carry fertilizer and as such, the supply of fertilizer has been reduced significantly in the Middle East urea market. There is production capacity in place, but there has also been a reduction in loading activity. This has resulted in supply bottlenecks in the fertilizer supply chain worldwide. While global fertilizer flow has been delayed, this has led to increased fertilizer prices for foreign customers due to limited availability.
The conflict in the region surrounding the Strait of Hormuz has disrupted the supply of liquefied natural gas to India, resulting in urea production being reduced to 50%-70% of normal capacity. Natural gas is the primary feedstock for urea production; therefore, the reduction in available gas has resulted in lower productions and additional costs while also raising concerns over the availability of fertilizers for the next Kharif crop season.
29-04-2026
Latest News
India plans to import 64 lakh tonnes of urea and 19 lakh tonnes of other kinds of fertilizers for this year’s Kharif season. This is in spite of the fact that global prices have nearly doubled because of the crisis in the Middle East. The main priority is to ensure that there is no shortage of these products at the time when farmers need them most, which is during a period of very high demand due to large volumes of seeds being sown. The government will continue to subsidise the cost of these products for farmers, in spite of the increased cost to the government, in order to maintain prices at the same level as before.
Russia and India—are building a urea plant with about 2 million tons of production capability per year, scheduled to be finished within the next 2 years. Due to the recent world-wide fertilizer crisis, resulting from tension in the Middle East, which has caused supply interruptions and prices to increase, this project is being expedited. The primary goal is to decrease India’s dependence on Middle Eastern imports for fertilizer and to ensure Indian farmers’ access to fertilizer on a continuing basis.
India has been working to develop a new investment program for urea, which will help significantly address the current supply shortage of approximately 100 lakh tonnes resulting in heavy reliance on urea imports. Given the price caps in the industry, the Urea Investment Policy (UIP) will create certainty for companies to invest in new urea plant construction with a defined subsidy policy up to eight years containing established floor and maximum rates.
The main objectives of the UIP include increasing the supply of urea produced in India, reducing the nation`s dependence on imports, and enhancing long-term security of supply, especially as a result of recent volatility of global prices caused by high natural gas prices and geopolitical instability.
29-04-2026
In order to curb illegal hoarding of urea and illegal sale of urea, the Maharashtra Agriculture Department has implemented strict control of urea sales to prevent black market, hoarding and other forms of exploitation by implementing new regulatory measures in konkan district. In addition, to ensure that farmers are able to obtain the urea fertilizer at the price mandated by the government without shortage or exploitation, officials are increasing inspections and monitoring dealers.
Conclusion
India`s Government has developed a Urea Strategy to fill an ongoing and significant supply gap and reduce its resource dependence from overseas fertilizer. The emphasis with this project is to provide sustainable fertilizer using higher volume outputs of Urea while controlling the average global cost of the material over an extended duration in-line with annual cost developments of Urea. Global urea prices have nearly doubled to ~$1000/ton due to Middle East tensions, supply disruptions, and high natural gas costs. India is importing record volumes (25 lakh tonnes in one tender) and planning even more imports for Kharif season to avoid shortages. Natural gas, which is the primary input into urea (one of three essential ingredients for producing fertilizer), is in short supply due to heightened tensions in West Asia. In addition, this is driving the price of fertilizer manufacturing up significantly, and therefore worldwide availability is decreasing. As a result of the skyrocketing prices of fertilizers around the globe, the price that Indian farmers pay for fertilizers is still set and have been unaffected by global increases, so the burden on government subsidies is increasing as well. In addition to diversifying its current supplier base from solely the Middle East to include other international sources like Canada and Russia to reduce procurement risk, India is now trying to achieve a balance between increasing imports of fertilizer and producing capacity domestically. However, extreme uncertainty of supply and global volatility will continue to be a major roadblock for India in accomplishing this goal.