**Tightening Urea Supply May See Prices Increase**
**Tightening Urea Supply May See Prices Increase**
**The Western Producer**
**By Sean Pratt**
**Published: May 9, 2024**
The global urea market is anticipated to tighten in the coming years, according to Yara International, a leading manufacturer. The peak of new capacity additions has passed, leading to a significantly lower supply growth from 2024 onward, said Thor Giaever, Yara International's chief financial officer, during a recent webinar. This slowdown in capacity expansion, coupled with growing consumption, is expected to result in higher urea prices.
Yara forecasts an addition of 1.5 million tonnes of global urea capacity (excluding China) this year, dropping to 1.1 million tonnes in 2025 and just 100,000 tonnes in 2026. This is a sharp contrast to the 4.9 million tonnes added in 2021, 6.2 million tonnes in 2022, and 4.4 million tonnes in 2023.
**Supply and Demand Dynamics**
Josh Linville, a fertilizer analyst at StoneX, concurs with Yara's analysis. He notes that fertilizer manufacturers are reluctant to build new facilities due to the high financial commitment and environmental concerns. This reluctance is expected to cause demand growth to outstrip supply growth, resulting in price increases.
**Current Market Prices and Future Outlook**
The current barge price for urea in New Orleans ranges between US$275 to $300 per tonne, which, while higher than the lows of summer 2020, is still below the peaks of spring 2022. Linville anticipates a gradual rise in prices but does not foresee a return to the extreme highs of recent years unless unexpected supply disruptions occur.
**Implications for Farmers**
Farmers are advised to stay informed about market trends as the tightening supply could impact urea availability and pricing. However, on-farm storage remains a challenge due to urea's sensitivity to humidity. Additionally, new technologies, such as India's nanotechnology urea, could potentially shift the supply-demand balance if proven effective.
**Contact Information**
For further details on sales of urea contact@meseinvestmentltd.com.ng
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**About the Author**
Ureaseller.com.ng is a seasoned exporter of urea at The global producer with 30 years of experience in trading urea 46% agriculture grade prilled or granules..
For more articles by ureaseller.com.ng and related coverage on fertilizer markets, visit The Western Producer's website.
