Friday’s Insider: China Returns to Urea Exports — A Controlled Comeback and a Healthy Dose for the Market

After months of speculation, China appears to be returning to the urea export market. Why “appears”? Because the official document shared with market participants still leaves some important questions unanswered. What is now clear, however, is that any exports will be regulated, monitored, and — I would even say — state-controlled.

Another key development is India’s restriction on its own fertiliser exports, further shifting market dynamics.

Why This Matters — and Why It’s Not a Disaster

In my view, this controlled return of Chinese urea is actually a healthy injection for the global market. Let me explain why.

1. No Market Collapse

Some were bracing for a collapse in prices if Chinese exports resumed unrestricted. That didn’t happen. Instead, this controlled return has offered a stabilising effect — and a correction the market arguably needs.

2. Price Correction = Affordability

Affordability remains a critical word in the fertiliser industry. Fertilisers, particularly nitrogen and phosphates, remain expensive relative to agricultural commodity prices. The market has been due for a rebalancing.

3. New Demand Triggered

Lower prices could unleash new demand. Consider Brazil: in the first four months of 2025, imports dropped to 1.775 million tonnes — the lowest level in four years:

• 2024: 1.974m tonnes
• 2023: 1.812m tonnes
• 2022: 1.996m tonnes

Some will argue this decline is due to increased use of ammonium sulphate, which offered better value per nitrogen unit. But again, this switch occurred precisely because urea remained too expensive.

4. Relief for Traders and Potential Upside

For those of us actively trading, this adjustment lightens the financial burden and opens up the possibility for upside movement. Personally, I prefer trading in a rising market — and that remains a possibility with prices now more balanced and demand likely to rise.

In short, China’s re-entry into the market — without crushing it — is not bad news. It’s a stabiliser, a stimulant, and perhaps even a signal that policymakers understand the balance the fertiliser world needs right now.

Let’s keep watching closely. As always, the devil is in the details — and in this case, in the implementation.

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About the Author of “Friday’s Insider”: Ilya Motorygin is the co-founder of GG-Trading and brings 30 years of experience to the fertilizer industry. Renowned for his comprehensive problem-solving skills, Ilya expertly manages deals from inception to completion, overseeing aspects such as financing, supply chains, and logistics.