I never would have thought that urea also has the power to make money.

Urea exports may halt due to US-Iran conflict, leading to a food crisis that could surpass 2022.

This image may be AI-generated.

By Daily Capital Theory

The urea crisis is coming, along with opportunities comparable to gold market prospects.

Data from Zhuochuang Information shows that as of March 4, the average price of small granular urea in China was 1,853.15 yuan/ton, up 2.82% from February 14 before the holiday. Internationally, in mid-March, a new round of Indian urea tenders saw the lowest bid at offshore prices of $512/ton on the East Coast and $508/ton on the West Coast, exceeding some earlier expectations.

Some brokerages indicate that geopolitical conflicts could disrupt urea production. Iran, the world’s third-largest urea exporter with an annual export volume of about 9 million tons, accounting for 10%–15% of global trade, has already caused international market supply tightness due to production halts. The Strait of Hormuz, a key maritime route for global fertilizer shipments, faces navigation security threats, further fueling concerns over supply chain disruptions.

In fact, international urea prices have surged like wild horses, soaring from $487 per ton before the conflict to over $700, with weekly increases exceeding 30%. Natural gas prices in Europe have risen nearly 40% in a week, as people realize that not only fertilizer but also the energy used to produce it is disappearing.

Currently, the urea crisis is already affecting some countries. Around March 10, several Indian urea plants have been forced to shut down. This is a critical planting season; even a one-day delay can impact subsequent harvests. As the world’s largest rice exporter and recently claiming to be the world’s fourth-largest economy, India, which aims to surpass Germany within three years, is now forced to seek aid from China due to urea supply issues.

Clearly, this is not just a fertilizer crisis but a brutal awakening about “cash capacity.” It makes the world realize that in this turbulent era, the ability to produce every grain of white crystals may be more reassuring for a nation than printing money itself.

In this distant war, India has become one of the first victims. The outcome is darkly humorous but also reveals fatal weaknesses behind its economic rapid rise.

The “no rice in the pot” energy vulnerability. India’s annual urea production reaches 31 million tons, ranking second globally, which sounds impressive. But behind this lies a big secret: India’s urea production relies on the “natural gas route,” with over half of its natural gas imports, mostly from the Middle East.

When the Strait of Hormuz is blocked, Qatar’s liquefied natural gas cannot be shipped out, and Indian fertilizer giants immediately feel suffocated. Natural gas supply drops below 70% of normal demand, forcing companies like Gujarat Narmada Valley Fertilizers & Chemicals Ltd. to issue force majeure notices. Some factories have to halt production or enter early maintenance. Even with the Indian government prioritizing natural gas for fertilizer plants, the problem remains unresolved—no rice, no solution.

The “no fuel in the car” logistics crisis is also severe. If you think the urea crisis only affects crops, you underestimate its “power.” India’s proud automotive industry also issues sharp warnings. On March 12, the Indian Automotive Manufacturers Association urgently wrote to the Ministry of Chemicals and Fertilizers, warning that a disaster threatening to paralyze the entire freight fleet is approaching.

Simply put, large diesel vehicles must use diesel exhaust fluid, commonly known as vehicle urea, to meet environmental standards. The core raw material for this fluid is high-purity “vehicle urea.” India’s demand for vehicle urea accounts for 50%–60% annually, mainly supplied from Dubai and Egypt—both affected by the conflict.

Imagine if vehicle urea supplies are cut off: many compliant commercial vehicles will be forced to “shut down,” causing widespread disruption in industrial and consumer goods logistics.

More urgently, the “global scramble for supplies” is underway. It’s not just India. The US, Brazil, Africa, and other regions are frantically stockpiling. The American Fertilizer Association reports that about 25% of the spring planting urea supply in the US has shortages. Brazil, a “world granary” relying 100% on imported urea, faces a “no rice in the pot” dilemma amid the blockade. It’s easy to see how awkward India’s current urea situation is.

Amidst global market fears, China, with its self-sufficient capacity and policy controls, acts as a “stabilizer” in this crisis.

China is the world’s largest urea producer, with an annual output of 75 million tons. Domestic consumption is about 62 million tons, leaving over 10 million tons available for export. More importantly, China’s urea production mainly relies on coal, with a self-sufficiency rate over 90%, unaffected by international natural gas prices. Coal-based urea accounts for 70%, with raw material costs locked in via long-term coal contracts, providing a solid foundation for domestic price stability.

On the policy front, China effectively blocks international price transmission through export quotas, maximum prices, and enterprise price stabilization commitments. Reports suggest that by 2026, China’s official urea export quota will total 3.3 million tons, with actual exports dynamically adjusted between 5 million and 8 million tons based on market conditions. The core principle is “domestic priority, appropriate exports,” mainly to ensure stable supply for key agricultural periods like spring and autumn planting, preventing large fluctuations in fertilizer prices.

Thanks to export controls and supply stabilization policies, China’s domestic urea prices remain stable at around 1,780–1,870 yuan/ton (about $265), only half of international prices. Exporting enterprises can earn significant profits at around 2,550 yuan/ton. This “advantageous” stability itself is a rare “cash capacity” in the turbulent global market.

Notably, some leading domestic urea companies listed on the A-share market are experiencing peak demand, full production, and tight inventories, with profits soaring. Data from Zhuochuang shows that by March 2026, the operating rate of domestic urea producers reached over 90%, with an average daily output exceeding 220,000 tons—near record highs. Despite this, supply-demand mismatches still cause regional shortages, further supporting prices to rise steadily.

The “cash capacity” of urea is rooted in its role as a strategic commodity in global relations, a core anchor for grain prices and inflation—beyond ordinary industrial products. The current Middle East conflict has exposed the fragility of developing countries’ agricultural supply chains, overly dependent on single import sources and logistics channels, leaving many agricultural nations vulnerable.

Note that about one-third of global urea exports come from the Gulf region. Among the top ten urea exporters, Qatar, Saudi Arabia, and others may see exports halted due to the US-Iran conflict. Experts predict that in the coming weeks, this impact could further influence food prices. The current Middle East conflict-induced food crisis could even surpass the devastation of 2022.

This image may be AI-generated.

From an ordinary investor’s perspective, this urea crisis offers a stark lesson: it redefines the strategic value of basic industrial commodities and reveals the survival logic amid global turbulence— even a top GDP country can only be passive if core agricultural inputs are cut off. It confirms a core principle: self-controlled industrial chains are the most solid foundation of a great power and the key to stable livelihoods. China’s industry structure centered on coal-based urea, high energy self-sufficiency, and comprehensive capacity layout may seem ordinary but is actually a “breakwater” against global risks, safeguarding domestic grain prices and social stability—more valuable than short-term profits.

From an investment standpoint, this urea market signals to market participants: keep your wallets tight! In the context of escalating geopolitical conflicts, commodity prices like urea, natural gas, and food are likely to fluctuate more violently in the short term. Blind speculation or chasing “bottom-fishing” is unwise. Rationally assessing market volatility, maintaining cash flow, and building emergency funds are pragmatic strategies to cope with global instability.

A reminder: as global geopolitical conflicts intensify, the strategic importance of commodities like urea will further increase. In this unpeaceful world, whoever controls these fundamental resources holds the power.

[This article is for informational exchange only and not investment advice. Please be aware of investment risks. Writing is hard; if your phone still has power, please like and share. Wishing all viewers a joyful 2026, a bright new year, accumulating blessings year after year, and a smooth journey through all seasons!]

Author’s note: Personal opinions for reference only.