By 2025, the total global demand for urea is anticipated to near 185.7 million tons. Within this landscape, India remains one of the largest consumers, with urea consumption reaching around 38.55 million tonnes in FY25, up from 35.73 million tonnes in FY23 representing a 7.2 per cent increase over two years.

This upward trend is primarily driven by rising domestic demand, fuelled by the expansion of cultivated land, intensified use of fertilisers to enhance crop productivity, and the continued implementation of government subsidies and support schemes. While consumption levels remained relatively steady around 35.7 million tonnes during FY22 to FY24, the notable jump in FY25 indicates renewed and growing demand likely influenced by shifts in agricultural practices, higher food production needs, and favourable policy measures.

Overall, the steady increase in urea consumption reflects India’s evolving agricultural priorities and its critical role in supporting both domestic food security and global urea market dynamics.

Urea Price Outlook
Over the past year, FOB urea markets have experienced a strong upward trajectory, driven by tighter supply fundamentals and higher production costs. Notably, FOB China prices have risen from approximately $344/Ton in July 2024 to $385/Ton in July 2025, marking a 12 per cent year-on-year increase. Similarly, Middle East prices surged by 19 per cent, respectively. This long-term uptrend is primarily attributed to the rally in global natural gas prices a key input for urea manufacturing amid supply constraints and elevated energy costs. Additionally, production slowdowns due to planned maintenance turnarounds in the Gulf region and export restrictions from China, aimed at safeguarding domestic availability, have tightened global supply. Geopolitical tensions in the Middle East have further disrupted trade flows and raised concerns over supply security, prompting more aggressive procurement strategies among buyers and adding sustained upward pressure on prices over the past 12 months.

In the short term, the urea market recorded a significant month-on-month upswing in July 2025. Compared to June, FOB prices increased by around 10 per cent in the Middle East, 8 per cent in Brazil, and 6 per cent in China. This upward movement was fuel by a combination of strong purchasing activity from key importing regions including India, Southeast Asia, and Latin America and a generally optimistic market outlook. Adding to the momentum, Chinese export prices moved higher due to tighter availability and regulatory caution, reinforcing global price strength. Market sentiment was also supported by growing concerns over trade policy uncertainty in major economies, which encouraged proactive buying. At the same time, rising geopolitical tensions in the Middle East have heightened concerns over supply stability, prompting buyers to advance their procurement plans. In parallel, Middle Eastern exporters have seen firm demand ahead of the upcoming agricultural season, keeping regional FOB offers on a strong footing.