Urea Futures Surge to Highest Since Oct 2022 on Supply Risks

Urea futures rose to as high as $684 per tonne, the highest since October 2022, and are more than 70% higher this year, as the war in the Middle East severely disrupts global fertilizer markets.

The conflict has driven a sharp spike in natural gas prices, a key input for urea production, and restricted flows through the Strait of Hormuz, which handles about a third of global fertilizer shipments.

Gulf Cooperation Council members, including Saudi Arabia, Qatar, and Oman, supply roughly a quarter of global urea exports, adding to concerns.

Also, production in India and Bangladesh has been hit by plant shutdowns and maintenance amid limited LNG supplies.

At the same time, China has tightened export restrictions to secure domestic supply, while Russia has curtailed shipments of key nutrients.

Demand is also surging ahead of the spring planting season, particularly in large agricultural economies, forcing countries to scramble for imports and pushing prices higher.