Nitrogen is always front of mind for growers, but this year, it’s taken centre stage across the entire ag industry!

Supply disruptions, shipping uncertainty and strong global demand have driven significant volatility in nitrogen fertiliser markets.

Ongoing Middle East supply disruptions are adding further pressure, with Australian granular urea recently reaching $1,400–1,500/t in some areas nearly double typical levels.

The World Bank Group recently forecast fertiliser prices could rise by more than 30% during 2026, with urea expected to be one of the most affected products. Some market analysts are forecasting urea prices to remain well above historical averages for much of the year.

Disruptions to trade routes through the Strait of Hormuz have been a key driver of recent price movements, undermining confidence in global supply chains given the Middle East’s role as a major urea exporter. At the same time, strong demand from major importers like India has kept markets tight.

China has recently eased its urea export restrictions, which may provide some relief, but it’s unlikely to fully offset ongoing supply concerns.

In Australia, we are heavily dependent on imported urea, with more than 90% of domestic requirements sourced from overseas markets. Recent industry estimates suggest Australia imported approximately 3.8 million tonnes of urea during 2025.

However, shipment volumes entering Australia have been mixed. Urea imports during the first quarter of 2026 were slightly below yearly levels, while February imports were down 26% compared with the previous year. Lower demand associated with dry seasonal conditions may have masked some of the supply tightness earlier in the year.

To support domestic availability, additional urea imports have been secured from Indonesia and through government-backed supply initiatives. These measures should help reduce immediate supply risks, although availability and pricing remain key concerns heading into the next major fertiliser purchasing window.

While forecasting fertiliser prices is notoriously difficult, several themes are likely to influence markets for the remainder of 2026:

• Global shipping conditions and Middle East stability
• Export volumes from China
• Demand from major importing countries eg. India.
• Seasonal conditions across Australia’s cropping regions

For growers, the key takeaway is that nitrogen markets remain highly sensitive to global events. While additional supply is gradually entering the market, significant volatility is likely to remain a feature of urea pricing throughout 2026.

As always, fertiliser decisions should be made in the context of seasonal outlook, crop potential and overall business risk, rather than short-term market movements alone.

By Greta Duff, Research & Extension Coordinator