The urea market has settled into a $440-470/t trading range after the volatility of Q2 2026. The global benchmark CFD closed at $451/t on July 24, essentially flat from mid-July levels but 21% above the June trough. The April Strait of Hormuz crisis — which pushed granular urea above $700/t in just five weeks — now seems distant, but its aftereffects linger in trade flows and procurement strategies.
At the heart of the normalization is China. Chinese export quotas resumed in late June at $660-670/t FOB for destinations outside India, providing a price floor for granular urea while easing supply constraints for import-dependent regions. Metalshub notes that Chinese prilled urea FOB assessments are the leading spot price reference for the sector, and the resumption of flows has been the single largest factor in price stabilization.
India remains the demand anchor. The next Indian tender — expected within weeks for kharif season top-dressing — will set the tone for August pricing. The previous IPL tender cleared at approximately $445/t CFR, a level that reflects both the return of Chinese supply and the lingering Hormuz freight premium. ICIS and Argus both assess Indian CFR at $440-455/t as of late July.
US retail prices tell a slightly different story. DTN's retail survey for the first full week of July showed urea at $714/short ton ($786/t), down 6% from June but still 9% higher year-on-year. The US market is well-supplied from domestic production and Canadian imports, with barge prices on the Mississippi lower than coastal CFR benchmarks.
Supply side: global urea production is running at capacity across the Middle East and North Africa, with Qatari and Saudi volumes filling European demand that previously relied on Russian product. Nutrien's Point Lisas Trinidad shutdown — announced in late 2025 — continues to tighten Atlantic basin availability, though the impact has been partially offset by higher US Gulf operating rates.
The Strait of Hormuz remains the wildcard. AFC Fertilizer Weekly (July 3) noted that 'the principal wildcard in fertiliser markets remains the Strait of Hormuz,' and that 'continued disruption could prolong supply chain uncertainty well into the second half of 2026.' Nearly one-third of the world's seaborne fertiliser trade transits the chokepoint. Any escalation would immediately reprice urea risk premiums.
French demand has also emerged as a supportive factor. Argus reported on July 10 that French granular urea prices rose sharply following the government's subsidy announcement. Prices climbed from €470/t fca on July 2 as buyers scrambled for coverage. The subsidy program for straight nitrogen fertilizers is expected to support European demand through the summer application window.
The bull case for urea rests on Hormuz escalation and stronger Indian buying. The bear case rests on full Chinese export normalization and weaker Brazilian demand. The base case: $440-470/t range through Q3, with the India tender providing directional signal.
For procurement teams sourcing urea, the current $440-470/t range offers a buying window ahead of the next India tender. If you buy on CFR terms, target $440-455/t for August-September delivery — the India tender will establish that floor. For US buyers, domestic barge prices on the Mississippi are a better deal than coastal CFR imports. Key risk: Hormuz freight premiums could re-emerge quickly. Mitigation: layer September coverage now and leave October open. The Chinese export policy is the most predictable variable — expect quotas to continue at current pricing levels through year-end. If you are price-sensitive, the post-harvest lull in October-November typically offers the softest pricing.