Global urea prices surge to $750 per ton as Gulf disruptions hit supply, Pakistan insulated by local output

Escalating tensions in the Middle East, disruptions to Qatari gas exports and the closure of the Strait of Hormuz have disrupted global fertiliser markets, tightening supply and pushing up prices, as per reports. 

Industry sources said the Gulf region, which accounts for nearly one-third of global urea exports, has faced production and logistics constraints, contributing to shortages in international markets.

Global urea prices have increased to $740–750 per ton, driven by feedstock shortages, shipping disruptions and supply uncertainty. Import-dependent economies, particularly in South Asia, are facing delays and higher procurement costs.

For Pakistan, where urea is a key input for crops such as wheat and rice, the gap between imported and domestic prices has widened. The landed cost of imported urea is estimated at Rs13,700 to Rs14,700 per bag, compared to around Rs4,400 per bag for locally produced fertiliser.

Industry officials said domestic manufacturers have maintained supply using local gas resources and existing production capacity, reducing exposure to global price volatility. Pakistan currently holds around 0.9 million tons of urea stocks, which are sufficient to meet demand during the upcoming Kharif season, subject to uninterrupted plant operations.

However, the situation differs for diammonium phosphate (DAP), where domestic production remains limited. Output is estimated at around 0.7 million tons, with Fauji Fertiliser Company’s Pakistan Qatar Plant (FFC PQ) being the country’s only DAP manufacturing facility.

Officials said this makes uninterrupted gas supply to the plant essential to sustain production and reduce reliance on imports. Pakistan’s annual DAP requirement ranges between 1.3 million and 2.3 million tons, leaving a significant shortfall that must be met through imports.

They warned that prolonged disruption in the Middle East could affect global DAP availability and lead to higher international prices, increasing pressure on import costs.

Officials added that stable domestic urea supply has helped contain the impact of global price increases on farm input costs, as higher fertiliser prices typically reduce usage, affect crop yields and contribute to food inflation.

By maintaining availability and stable pricing, the domestic fertiliser sector has supported agricultural output and limited the transmission of global price shocks to the local economy.