Urea Outlook 2027: China’s Exports, India’s Tenders and New Capacity

Where the urea market stands before 2027

Any urea outlook for 2027 starts from an unusually volatile year. In April, Indian Potash Ltd (IPL) bought a record 2.5 million t for India at $935/t CFR for the west coast and $959/t for the east coast, after receiving offers for 5.6 million t ^[6]. The World Bank's April Commodity Markets Outlook (CMO) projected urea prices to rise nearly 60% in 2026 ^[16]. How the Gulf shock first reached gas and fertiliser markets is covered in our analysis of LNG, gas prices and urea.

Prices then fell sharply. In IPL's tender of 7 October, the lowest east coast offer was $352.10/t CFR, about $607/t below the 15 April tender, and a west coast offer came in at $356.25/t ^[4]. Owen Gooch of Argus estimated that 3.7 million t of urea demand was destroyed or deferred in April–June, 27% less than a year earlier ^[2].

Gulf supply remains constrained. In the first half of 2026, nitrogen exports fell 63% from Saudi Arabia, 37% from Qatar and 29% from the UAE, according to IFPRI ^[15]. By late October, the Australian Fertiliser Corporation (AFC) put Middle East urea at $430–440/t FOB, Egyptian urea at $535/t FOB, Chinese granular at $440/t FOB and Brazil at about $490/t CFR ^[5].

China's urea export quotas: the main swing factor

China has controlled fertiliser exports through an inspection regime since late 2021, adding quotas with guidance prices in 2025. Its urea exports fell from about 5–6 million t in 2021 to 0.26 million t in 2024 ^[9]. Reuters reported that China exported 4.9 million t in 2025, below its historical range of 5–5.5 million t, which StoneX says is typically about 10% of global urea exports ^[1].

In 2026 the policy tightened, then loosened. China banned exports of many fertiliser categories in March, and in late May industry sources said about 1.5 million t of urea quotas had been issued, a figure Reuters could not verify ^[1]. A third tranche of 1 million t was reportedly confirmed in September ^[3], and China announced a fourth tranche in October with no specified shipment expiry ^[4]. IFPRI data show China's nitrogen exports reached 2.8 million t in the first half, up about 47%, with shipments to India up more than 200% ^[15]. In July, Argus forecast Chinese urea exports of 6.5 million t for 2026 ^[2].

Chinese sellers have also shown they will hold out for higher prices. AFC reported that they rejected the returns implied by India's October tender, even though China holds significant urea inventories and domestic demand is subdued ^[5]. For early 2027, The Western Producer, drawing on Argus analysis, expected prices to rebound a little in the first quarter, which is peak demand season, as China retreats from the export market for its own growing season ^[2]. The size and timing of China's 2027 quotas are therefore the largest single uncertainty.

India's urea tenders and new domestic capacity

India remains a major importer. Its demand is about 40 million t a year and growing at around 5% a year, while 33 plants produce about 30 million t. The deficit of about 10 million t, roughly a quarter of demand, is met by imports ^[7]. In 2026, lower LNG supply also hit domestic output: India's nitrogen imports rose 52% in the first half, and its fertiliser subsidy bill may exceed 3 trillion rupees ($31 billion), against a budgeted 1.71 trillion ^[15].

The tender cycle shows how quickly the balance has shifted. A Rashtriya Chemicals and Fertilizers (RCF) tender in September drew about 1.6 million t of nominations, mostly from China ^[3]. IPL's October tender received offers totalling about 5.3 million t gross from 25 companies ^[4], but India secured only about 410,000 t against a 1.7 million t target ^[5]. AFC expects a new tender, possibly approaching 2 million t, with substantial Chinese participation if the lowest price is around $375/t CFR ^[5].

New Indian capacity will take time. In July the government approved the National Investment Policy for Urea-2026, which aims for eight to nine new gas-based plants of about 1.27 million t each, or about 10 million t in total ^[7]. GlobalData estimates that India will account for about 13.7% of global urea capacity additions to 2030, with the Talcher and Namrup projects targeted for 2027 and 2029 ^[8]. Most of this capacity is therefore unlikely to affect imports in 2027.

Russia, Egypt and Nigeria: the other suppliers

• Russia. Russia has used twice-yearly export quotas since December 2021. In April it raised the quota to 20 million t for June–November 2026, including about 8.7 million t of nitrogen fertilisers ^[9]. The Western Producer reported that new Russian production could reach export markets in November–December ^[2].
• Egypt. Egypt has 7.2–7.3 million t/yr of urea capacity and exported an average of about 4.5 million t/yr in 2023–25. The suspension of Israeli gas exports removed roughly one LNG cargo every four days from its supply balance, and output is most exposed in summer, when power demand peaks ^[10]. A 2025 gas pricing reform raised the share producers may export to 55% ^[9].
• Nigeria. Indorama's third Nigerian urea line is due to be commissioned in 2026, lifting its capacity to about 4.2 million t/yr. Dangote has awarded contracts that would take its urea capacity above 8 million t/yr ^[11]. Nigeria's urea exports rose from about 660,000 t in 2017 to more than 3 million t in 2024 ^[11].
• Americas. US nitrogen exports rose almost 60% in the first half of 2026, and US urea exports almost tripled ^[15]. In Trinidad, Nutrien announced an indefinite shutdown of its nitrogen operations because of gas supply constraints ^[5].

Natural gas prices: the cost floor for urea

Most ammonia and urea is made from natural gas, so gas prices set the cost floor for higher-cost producers. On 26 October the front-month TTF contract rose to €95.73/MWh, more than $30/MMBtu and the highest since autumn 2022. EU gas storage stood at 74.62% against a five-year average of about 86% ^[13]. AFC reported in September that elevated gas costs were reducing European production rates ^[3].

US producers face a very different cost base. The US Energy Information Administration (EIA) forecasts Henry Hub to average $3.48/MMBtu in 2026 and $3.16/MMBtu in 2027, as production growth offsets rising LNG exports ^[14]. A wide gap between TTF and Henry Hub leaves European plants near the top of the cost curve. AFC reported that Europe was the likely destination for recent Egyptian sales at $535/t FOB ^[5].

What the published urea price outlooks say

The World Bank's April baseline put urea at an average of about $675/t in 2026, close to 60% above 2025. It said prices may drop 25% in 2027 if natural gas costs ease. If shipping constraints persisted or hostilities resumed, the 2026 average could exceed the 2022 average of $700/t ^[12]. The Bank said risks were tilted upward if energy prices stayed high or Hormuz-related disruption continued beyond the third quarter of 2026 ^[16].

The Western Producer's July outlook, based on Argus views, expected prices to ease in November–December as new Nigerian and Russian supply reached export markets, Middle East supply improved and China announced its final quota, before a partial rebound in early 2027 ^[2]. Taken together, these views suggest three broad scenarios rather than a single forecast:

• Easing: Gulf exports recover, China keeps issuing quotas and European gas eases. This is closest to the World Bank's case for a 25% fall in 2027 ^[12].
• Range-bound: Chinese, Nigerian and Russian volumes cover India's tenders, but European gas stays high and Gulf supply recovers slowly. This resembles the late-2026 easing and early-2027 rebound described above ^[2].
• Tightening: Gulf disruption persists, European plants curtail output over winter and China limits 2027 quotas, in line with the upside risks the World Bank flagged ^[16].

What to watch in the urea market

• India's next tender: its size, and whether Chinese suppliers accept prices near $375/t CFR ^[5].
• China's 2027 quotas: the volume, minimum prices and timing of the first-quarter pause ^[2].
• European gas over winter: TTF levels and storage, and any further ammonia or urea curtailments ^[13].
• Gulf export recovery: the pace at which Saudi, Qatari and Emirati nitrogen exports return ^[15].
• New supply: Indorama's third line, Russia's next quota period from December, and Egypt's summer gas balance ^[9,10,11].

Alupetra follows urea supply, tenders and pricing from its offices in Istanbul, London and Dubai.