During the inaugural month of 2025, the global Urea market exhibited divergent trends across key regions. While prices of Urea experienced a notable uptrend in the European market, they remained largely stagnant in the Asian market, with India being the most prominent region affected by this stability. The price surge in Europe can be primarily attributed to a supply shortage of Urea and its key feedstock, Ammonia, within the regional market. This constraint has been exacerbated by production curtailments and regulatory developments that have tightened the overall availability of nitrogen-based fertilizers. Conversely, the Indian market managed to sustain a relatively balanced supply-demand dynamic during the period under review, preventing any significant price fluctuations in Urea.

In the European market, the prices of Urea have witnessed a substantial month-on-month increase, driven by a confluence of supply-side constraints and regulatory developments. According to various market reports, one of Germany’s major fertilizer producers, SKW Piesteritz in Wittenberg, has announced a reduction in its fertilizer production. The company has attributed this decision to the prevailing market conditions and the existing political framework, which have made operations increasingly challenging. Prior to this, the nitrogen production facilities had already undertaken cost-cutting measures in response to rising operational expenses. Consequently, the availability of nitrogen-based fertilizers, including Urea, has declined, contributing to a supply shortage across the European market. On the demand side, purchasing activity for Urea has remained modest owing Wheat, Barley and Spring planting season.

Further exacerbating the situation, the European Commission, on January 28, 2025, adopted a proposal to impose tariffs on nitrogen-based fertilizers imported from Russia and Belarus. This regulatory measure is expected to further elevate fertilizer prices, intensifying the financial burden on European farmers who are already contending with heightened input costs. Spain, in particular, has been increasingly reliant on fertilizer imports from Russia, raising concerns about potential supply disruptions and escalating costs in the near future. Given these developments, the upward trajectory of Urea prices is anticipated to persist in the coming weeks.

In the Indian market, Urea prices remained stable throughout January 2025. Demand for Urea during this period remained consistent, with most transactions being fulfilled through contractual agreements, while no significant spot purchasing activity was observed. Notably, Rashtriya Chemicals and Fertilizers (RCF) received offers in its latest tender for shipments scheduled for early March 2025. On the supply side, inflows of cargoes remained steady, particularly from the Middle East, ensuring stable market conditions. Additionally, India has announced plans to establish a new Urea production facility with a capacity of 1.27 million tonnes per year in the eastern state of Assam. This strategic initiative aims to reduce the country’s reliance on imports and enhance domestic self-sufficiency in fertilizer production. Furthermore, the Indian government has allocated a larger infrastructure budget for the upcoming fiscal year, ending in March 2026, signaling continued investment in the agricultural and industrial sectors.

According to ChemAnalyst, Urea prices in the global market are projected to rise in the coming months, driven by an anticipated increase in fertilizer demand ahead of the winter planting season. The seasonal uptick in agricultural activity is expected to bolster consumption levels, leading to heightened procurement of Urea by key farming regions.