Pakistan’s urea holds steady as global prices surge 65% amid Hormuz disruption

Pakistan’s urea market has remained stable despite a sharp surge in global prices, with local rates holding around Rs4,400–4,450 per bag even as international prices climbed by about 65% due to disruptions linked to the US–Iran conflict, according to Arif Habib Limited. 

Global urea prices have increased from $411 per ton in February 2026 to $679 per ton, driven by supply concerns as roughly one-third of global trade flows through the Strait of Hormuz, which has faced disruptions.

In contrast, Pakistan’s domestic market has remained insulated, with local prices trading at a significant discount to international equivalents. The gap has widened to around 53%, compared to a historical average discount of about 30%, with the difference increasing further after accounting for import duties.

The pricing dynamics follow a period of aggressive discounting by local manufacturers in December 2025, when Engro Fertilizers (EFERT) reduced prices by Rs400 per bag and Fauji Fertilizer Company (FFC) offered discounts of Rs150–200 per bag. The move led to record urea sales of 1.36 million tons.

Since then, pricing strategies have shifted. EFERT initially lowered its discount to Rs250 per bag and reduced it further by Rs150 per bag in the last week, while FFC had already withdrawn its discounts earlier.

According to the brokerage firm, the current pricing trend reflects stable domestic supply conditions despite volatility in global markets, with local producers adjusting discounts after strong sales volumes.