What tight urea supplies mean for global prices and New Zealand farmers

Urea is by far the most widely traded fertilizer in the world, and for New Zealand it represented 29% of total fertilizer imports in 2024. Given complex supply chains, urea prices are particularly vulnerable to supply shocks in producing countries and have a tendency to trade with significant volatility. In New Zealand dollar terms, prices are currently trading around the five-year average. However, if we were to compare current prices with the pre-Russia-Ukraine war five-year average price, they are 45% higher. Natural gas, the predominant feedstock for urea production, is the other key influence in markets. The sensitivity of natural gas markets to both weather and geopolitical events adds to the volatility of urea prices. In this report, we consider the key supply and demand factors that will likely influence global urea prices in 2025, such as ongoing supply issues in Europe, Iran, Egypt, and China.