Brazil’s structural shift to ammonium sulfate is pulling urea prices down; China’s return is the year’s biggest wildcard

Global urea prices pulled back sharply in May as Brazilian importers shifted to cheaper ammonium sulfate (amsul), with Brazil overtaking urea import volumes for the first time in 2025 and continuing to widen the gap into Q1 2026, according to Argus Media analysis.

Brazil imported 1.75 million tonnes of ammonium sulfate in the first four months of 2026, compared with 1.4 million tonnes of urea — a reversal of a relationship that five years ago saw urea running at twice amsul volumes. Ammonium sulfate provides 21% nitrogen and 24% sulfur but costs substantially less per tonne at current market levels than urea’s 46% nitrogen product, making it the economic choice for cost-pressured Brazilian farmers operating on compressed margins.

The shift follows a price spike triggered by the closure of the Strait of Hormuz and cemented by India Potash’s record April 15 tender, in which 2.5 million tonnes of urea was purchased at $935–959 per ton. Urea futures fell to $542.50 per ton on May 21, down 22% from the monthly high, though still 18% above year-ago levels.

The critical variable going forward is China. After exporting nearly 5 million tonnes in 2025, China has been absent from global urea markets entirely through May 2026, with export controls still in place. Analysts at Argus Media note that China’s re-entry would exert significant downward pressure on prices given its 10–15 million tonnes of latent annual export capacity. “If and when they are back, that is going to have serious ramifications on price direction for the rest of the year,” one Argus analyst told industry media.

Brazil’s main buying season begins in August, when soybean and corn planting preparations intensify. Brazilian farmers are unlikely to match the subsidized Indian tender prices, creating a de facto ceiling for the summer market at current amsul-parity levels. Watch: a further 2–3 million tonne Chinese export release before September would likely push CFR Brazil urea prices back toward $450–480 per ton.

Source: Western Producer