Australia Urea Market Overview: Demand, Supply & Pricing Analysis

Australia Urea Market Size and Forecast 2025–2033

According To Renub Research Australia urea market is projected to grow from US$ 1,191.73 million in 2024 to US$ 1,814.20 million by 2033, registering a compound annual growth rate (CAGR) of 4.78% during the forecast period 2025–2033. This growth trajectory is driven by rising fertilizer demand from the agricultural sector, expanding grain and crop cultivation, and increasing government incentives focused on sustainable agriculture. Import substitution strategies and emerging opportunities for domestic production are also shaping market dynamics, as Australia seeks to strengthen fertilizer security and reduce exposure to global supply volatility.

Australia Urea Market Overview

Urea is a nitrogen-rich chemical compound with the formula CO(NH₂)₂ and is widely used as a fertilizer due to its exceptionally high nitrogen content of approximately 46%. This makes urea one of the most efficient and concentrated nitrogen fertilizers available globally. In Australia, urea plays a critical role in enhancing soil fertility and improving crop productivity across a wide range of agricultural applications.

The fertilizer is extensively applied in grain farming, pasture management, and horticulture. Australian farmers favor urea for its cost-effectiveness, ease of storage and transport, and versatility in application methods, including broadcasting, top-dressing, and fertigation. Beyond agriculture, urea is also used in industrial processes such as resin and plastic manufacturing and in the production of diesel exhaust fluid (AdBlue), which supports vehicle emission reduction.

Australia currently relies heavily on imported urea to meet domestic demand, making the market sensitive to global pricing trends, logistics disruptions, and geopolitical developments. However, ongoing discussions around enhancing domestic production capacity and expanding strategic storage infrastructure are expected to improve supply stability. With increasing pressure to boost food production while adopting environmentally responsible farming practices, urea remains a foundational input in Australia’s agricultural ecosystem.

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Growth Drivers in the Australia Urea Market

Increasing Demand from the Agricultural Sector

Agriculture remains the primary driver of urea consumption in Australia. The country’s extensive grain production, livestock grazing systems, and horticultural activities create sustained demand for nitrogen fertilizers. Urea’s high nutrient concentration and affordability make it the preferred nitrogen source for farmers aiming to improve crop yields and maintain soil health.

As global food demand rises, Australian agricultural producers are under pressure to increase productivity and efficiency. Urea enables farmers to enhance nitrogen-deficient soils, particularly in large-scale wheat, barley, and canola cultivation. The continued expansion of broadacre farming and export-oriented agriculture is expected to support consistent urea demand across key farming regions.

Government Support for Fertilizer Security and Sustainability

The Australian government has introduced a range of initiatives aimed at improving fertilizer security and encouraging sustainable nutrient management. Policies promoting domestic manufacturing, improved supply chain logistics, and responsible fertilizer usage are designed to reduce reliance on imports and mitigate supply risks.

Programs linked to soil health improvement, precision agriculture, and climate-smart farming are encouraging more efficient fertilizer application. These measures support urea demand while addressing environmental concerns such as nutrient runoff and greenhouse gas emissions. In August 2024, the Australian Farm Institute received a government grant to support international collaboration on sustainable agriculture, reinforcing the national commitment to environmentally responsible food production and input usage.

Growth and Development of Livestock and Feed Industries

Australia’s livestock sector is another important contributor to urea demand. Urea is commonly used as a non-protein nitrogen source in ruminant feed, particularly for cattle and sheep in regions where pasture quality is low. It supports microbial protein synthesis in the rumen, improving feed efficiency and animal performance.

With growing domestic consumption and export demand for meat and dairy products, livestock producers are increasingly focused on optimizing feed formulations. Urea also supports pasture regeneration and forage quality, indirectly benefiting animal productivity. In August 2024, Australian company Food Recycle raised USD 3 million to expand its technology for converting food waste into animal feed, highlighting the broader innovation momentum within the feed and nutrition ecosystem.

Issues in the Australia Urea Market

Heavy Reliance on Imports and International Price Fluctuations

Australia’s dependence on imported urea exposes the market to global price volatility, shipping disruptions, and geopolitical risks. Major supply sources include the Middle East and Southeast Asia, and any interruption in these regions can significantly impact domestic availability and pricing.

Price spikes can strain farm budgets and reduce fertilizer affordability, directly affecting agricultural profitability. The lack of large-scale domestic production limits Australia’s ability to control supply costs, making investment in local manufacturing and diversified sourcing a key long-term challenge for the market.

Environmental and Regulatory Restraints

Improper or excessive use of urea can lead to environmental issues such as nitrogen leaching, water pollution, and increased greenhouse gas emissions. As a result, regulatory scrutiny over fertilizer application practices is increasing across Australia.

Farmers are being encouraged to adopt precision agriculture techniques and comply with stricter environmental guidelines. While these measures support long-term sustainability, they can increase operational costs and require investment in new technologies and training. Balancing productivity with environmental responsibility remains a critical challenge for the widespread use of urea.

Australia Fertilizer Grade Urea Market

Fertilizer-grade urea accounts for the largest share of the Australian urea market due to its extensive use in crop cultivation and pasture management. Its high nitrogen concentration and compatibility with other nutrients make it a preferred choice for farmers seeking efficient nutrient delivery.

This grade is widely used in the production of high-yield crops such as wheat, barley, and canola. Government incentives promoting soil health improvement and precision farming further support demand for fertilizer-grade urea. As food security and agricultural productivity remain national priorities, this segment is expected to grow steadily through 2033.

Australia Agriculture Urea Market

The agricultural sector is the dominant end user of urea in Australia. Demand is driven by the need to enhance soil fertility, improve crop yields, and support sustainable farming systems. Urea is particularly important in nitrogen-deficient soils common across Australia’s wheatbelt regions.

Its role in crop rotation systems and conservation agriculture practices reinforces long-term demand. Seasonal factors such as rainfall patterns and planting cycles influence application rates, but the overall outlook remains stable as productivity enhancement remains a core industry objective.

Australia Animal Feed Urea Market

Urea plays a significant role in animal nutrition, especially for ruminants. As a non-protein nitrogen source, it improves the digestibility of low-quality forage and crop residues, making it especially valuable during drought periods.

Strict regulations govern feed-grade urea usage to ensure animal safety. With expanding feedlot operations and rising meat export demand, the use of urea in animal feed is expected to gain further traction over the forecast period.

Regional Analysis of the Australia Urea Market

New South Wales

New South Wales is one of Australia’s largest urea-consuming states due to its extensive grain production and livestock farming activities. Wheat, barley, sheep, and cattle farming drive consistent demand throughout the year. Sustainable farming initiatives and advanced logistics networks support efficient fertilizer distribution across the state.

Victoria

Victoria’s urea market benefits from intensive dairy farming, horticulture, and high-value crop production. Urea is widely used in pasture renewal, silage preparation, and crop fertilization. The state’s focus on nutrient efficiency and precision agriculture is shaping responsible fertilizer usage trends.

South Australia

South Australia’s dryland farming systems rely heavily on urea to support cereal crop production. Low rainfall and nutrient-poor soils necessitate strategic nitrogen application. Government extension services and research programs help farmers optimize fertilizer use in challenging climatic conditions.

Queensland

Queensland’s diverse agricultural profile makes it one of the most significant urea markets in the country. High nitrogen demand in sugarcane cultivation, multiple cropping seasons, and extensive livestock operations contribute to strong urea consumption. Nutrient management programs are promoting balanced fertilizer use across the state.

Market Segmentation

By Type

·        Technical Grade

·        Fertilizer Grade

·        Feed Grade Urea

By Application

·        Agriculture

·        Chemical Synthesis

·        Animal Feed

·        Others

By Top States

·        New South Wales

·        Victoria

·        Queensland

·        Western Australia

·        South Australia

·        Australian Capital Territory

·        Tasmania

·        Northern Territory

Competitive Landscape

All major companies operating in the Australia urea market have been analyzed across five key viewpoints: company overview, key personnel, recent developments, SWOT analysis, and revenue performance. The competitive environment includes both global fertilizer producers and diversified agribusiness companies.

Key Players

·        BASF SE

·        Petrobras

·        SABIC

·        Bunge Limited

·        Nutrien Ltd.

·        Sasol

·        CF Industries Holdings Inc.

Final Thoughts

The Australia urea market is positioned for steady and sustainable growth through 2033, supported by expanding agricultural activity, government-backed fertilizer security initiatives, and rising demand from livestock and feed industries. While heavy reliance on imports and environmental regulations present ongoing challenges, strategic investments in domestic production, efficient nutrient management, and supply chain resilience are expected to strengthen market stability.

With agriculture remaining a cornerstone of Australia’s economy, urea will continue to play a vital role in supporting food security, productivity, and long-term sustainability. As the industry adapts to evolving environmental and economic pressures, the urea market is set to remain a critical component of the nation’s agricultural input landscape.