Urea Market Size, Share, Analysis & Forecast 2034

Global Urea Market Outlook

The global urea market reached a volume of 177.21 million metric tons (MMT) in 2024 and is expected to grow at a CAGR of 0.90% between 2025 and 2034. By 2034, the market is projected to reach a volume of 193.82 MMT, driven primarily by the growing demand for urea as a fertilizer in the agricultural sector. Urea is a vital nitrogen-based fertilizer, widely used to improve soil fertility and enhance crop yields, which makes it a critical component of global food production.

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This steady growth in the urea market is fueled by the increasing demand from the agriculture sector, which continues to expand in response to rising food demand due to the global population growth. As a widely used fertilizer, urea plays an essential role in agricultural productivity, particularly in developing regions that are focusing on improving food security.

In this blog post, we will examine the factors driving the growth of the urea market, key applications, emerging trends, challenges, and the future outlook for the sector.

Key Drivers of Growth in the Global Urea Market

1. Growing Demand from the Agricultural Sector

The primary driver behind the growth of the urea market is the increasing demand from the agriculture sector. As global food production must rise to meet the needs of a growing population, the demand for fertilizers like urea continues to increase. Urea is one of the most widely used nitrogen fertilizers in the world, and it is particularly valued for its high nitrogen content, which is essential for plant growth.

Farmers rely on urea to boost crop yields, particularly for staple crops such as wheat, corn, rice, and soybeans. The increasing need to maximize agricultural productivity in response to both population growth and climate change is expected to drive the continued demand for urea fertilizers.

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2. Expansion of Agricultural Practices in Emerging Economies

The demand for urea is particularly strong in emerging economies, such as those in Asia-Pacific and Africa, where agriculture plays a central role in the economy. In countries like India, China, and Nigeria, where the agricultural sector is a major contributor to employment and GDP, urea is essential to increasing food production.

As these regions work to increase agricultural productivity, the use of urea as a fertilizer is set to grow. Governments in these countries are also implementing policies to boost agricultural efficiency, which includes supporting the use of fertilizers like urea to improve soil quality and crop yields.

3. Increasing Focus on Sustainable Farming Practices

As the world shifts toward more sustainable farming practices, there is growing attention on the responsible use of fertilizers, including urea. The agricultural industry is adopting more efficient and environmentally conscious methods of fertilization to reduce the environmental impact, such as using controlled-release urea or coating urea with inhibitors to slow down its release into the soil.

The shift toward precision agriculture and integrated nutrient management strategies is contributing to more effective and environmentally friendly urea usage, ensuring its continued demand while addressing sustainability concerns.

Applications of Urea

1. Fertilizers

Urea is predominantly used as a nitrogen fertilizer. As a key source of nitrogen, it is essential for the healthy growth of plants and improving crop yields. Urea is applied to soils in various forms, including granular and liquid, and is effective in promoting growth in a wide range of crops. Its high nitrogen content makes it one of the most efficient fertilizers for enhancing plant productivity.

2. Industrial Applications

Beyond its use in agriculture, urea is also utilized in several industrial applications. It is a key component in the production of urea-formaldehyde resins, which are used in the manufacturing of adhesives, particleboard, and laminates. Additionally, urea is used in automobile exhaust systems for reducing nitrogen oxide (NOx) emissions in diesel engines, a process known as Selective Catalytic Reduction (SCR).

The industrial application of urea also extends to the pharmaceutical industry, where it is used in the production of certain drugs and in the manufacture of cosmetic products for skin care.

3. Animal Feed

Urea is sometimes used in animal feed as a source of non-protein nitrogen (NPN) for ruminants, such as cows and sheep. It is an important supplement in livestock farming, as it helps improve the efficiency of protein digestion and overall animal health.

Emerging Trends in the Urea Market

1. Focus on Environmental Sustainability

There is an increasing focus on sustainable fertilizer practices as concerns grow over the environmental impact of conventional farming methods. The global agricultural sector is moving toward more efficient fertilization techniques, including the use of slow-release urea and enhanced-efficiency fertilizers (EEFs), which help reduce nitrogen losses and increase the sustainability of crop production.

The development of environmentally friendly fertilizers that reduce ammonia volatilization, nitrate leaching, and greenhouse gas emissions is an important trend in the urea market. This focus on sustainability aligns with global efforts to address climate change and reduce the agricultural sector's carbon footprint.

2. Fertilizer Subsidy Programs in Developing Countries

Many developing countries are implementing fertilizer subsidy programs to make urea and other fertilizers more affordable to farmers. This has led to increased demand for urea in regions like Africa and South Asia, where access to fertilizers has traditionally been limited due to high costs. These subsidies help improve agricultural productivity by ensuring that farmers can afford to purchase the necessary inputs for crop growth.

3. Technological Advancements in Fertilizer Application

The advancement of precision agriculture technologies is also affecting the urea market. Technologies such as drones, satellite imaging, and soil sensors allow farmers to apply fertilizers more precisely and efficiently, minimizing waste and improving crop yields. As these technologies become more accessible, they will help drive the demand for urea by enabling its more effective and targeted application.

Challenges Facing the Urea Market

1. Price Volatility of Raw Materials

The price of raw materials used in the production of urea, such as natural gas (which is a key feedstock in urea production), is subject to fluctuations. These price variations can impact the cost of urea production and, consequently, the price of fertilizers. Price volatility can also affect the affordability of urea, especially in regions where subsidies are not available.

2. Environmental Impact and Regulation

Urea, when over-applied, can lead to environmental issues such as soil acidification, nitrate contamination of groundwater, and greenhouse gas emissions. Governments and regulatory bodies are imposing stricter environmental regulations on the use of fertilizers, which could affect the demand for urea. Producers are under increasing pressure to innovate and develop more environmentally friendly alternatives to traditional urea fertilizers.

Key Players in the Urea Market

Several prominent companies dominate the global urea market, including:

Nutrien Ltd.: One of the largest global producers of urea and other fertilizers, Nutrien provides urea solutions for agricultural, industrial, and animal feed applications.

CF Industries: A leading producer of nitrogen-based fertilizers, CF Industries manufactures urea and other nitrogenous fertilizers used in agriculture.

Yara International ASA: Yara is a major player in the urea market, providing nitrogen-based fertilizers and other agricultural products for the global market.

OCI Nitrogen: A global producer of nitrogen fertilizers, including urea, OCI Nitrogen plays a significant role in meeting global agricultural demand.

EuroChem Group: A major supplier of urea and other fertilizers, EuroChem serves agricultural markets worldwide, providing products that improve crop yields.

Future Outlook for the Urea Market

The global urea market is poised for moderate growth, with an estimated CAGR of 0.90% from 2025 to 2034. The growing demand for urea in agriculture, coupled with the rising need for sustainable farming practices and the adoption of advanced fertilization techniques, will continue to drive the market forward. The increasing use of precision agriculture technologies and fertilizer subsidy programs in developing countries will also play a key role in boosting demand.

As global food production must increase to feed a growing population, urea will remain a critical component of agricultural productivity. However, the industry will need to balance increased demand with environmental concerns and the development of more sustainable fertilizer products.

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