Global urea prices have plummeted by nearly 60% since April, falling from almost $1,000 per tonne to below $400. This significant decline is attributed to increased Chinese exports, with China expected to ship at least 1.2 million tonnes of urea to India, and an overall improvement in global supply chains. This reversal comes after earlier projections indicated that India's fertilizer subsidy bill for FY27 could surge to as much as ₹2.41 lakh crore ($29 billion USD), significantly above the budgeted ₹1.71 lakh crore ($20.5 billion USD), primarily due to high import costs following geopolitical tensions in West Asia.
The fall in prices is providing substantial relief to the Indian government, which heavily subsidizes urea for its farmers. For instance, India recently secured 1.7 million tonnes of imported urea at a landed cost of $390.25-$393.65 per tonne, marking the lowest price this year compared to over $900 in April. This price correction could reduce the fiscal strain caused by the subsidy bill, as the government bears the difference between the cost of supplying urea and its controlled retail price to farmers.
Beyond price, urea availability has also improved. India imported 2.508 million tonnes of urea during April-June 2026, nearly triple the 838,000 tonnes imported during the same period last year. Domestic production also saw an increase, from 6.788 million tonnes to 7.153 million tonnes. Industry sources indicate no shortage of urea for the current kharif or upcoming rabi seasons, further easing concerns about potential food crises.
However, a key vulnerability remains China's export policy. While current loosened restrictions have boosted global supply, any future tightening by Beijing to protect its domestic food security could quickly reverse the positive trend, putting upward pressure on international prices once again, especially if combined with renewed geopolitical or energy market disruptions.
