China’s 2026 Urea Export Policy: From $660/t Price Floor to 3.3M-Tonne Quota

China’s return to the urea export market in 2026 became one of the most important supply-side developments in global nitrogen trade, but the policy changed significantly after exports first reopened in June.

The initial reopening was accompanied by a minimum export price of about $660 per metric ton, limiting how aggressively Chinese producers could compete with other suppliers. By the third quarter, however, Beijing had moved toward a more flexible system combining annual export quotas with lower destination-specific FOB price floors.

By September, the market was working with an estimated 2026 urea export quota of about 3.3 million metric tons, while minimum FOB prices had fallen to roughly $430–440/t for most destinations and about $500/t for India-bound cargoes.

China reopened urea exports in June 2026

China had sharply restricted fertilizer exports earlier in 2026 as authorities prioritized domestic supply and affordability.

Fertilizer Daily reported in April that tighter inspection and export-control mechanisms had reduced China’s role in international fertilizer trade, particularly for nitrogen and phosphate products.

By early June, export conditions began to ease.

Trade reporting indicated that Chinese urea exporters were again being allowed to sell into international markets, but only above a minimum price of approximately $660/t.

The mechanism was designed to prevent low-priced Chinese cargoes from sharply undercutting international markets while still permitting controlled exports.

The $660/t floor was only the first stage

The June reopening should not be interpreted as a permanent fixed-price policy.

As the year progressed, Chinese export policy evolved from a relatively high headline minimum price toward a combination of quota limits and lower price floors.

China’s 2026 urea export quota is about 3.3 million tonnes

By September, market participants were working with an estimated Chinese urea export quota of approximately 3.3 million tonnes for 2026.

That is substantially below China’s 2025 exports, which were close to 5 million tonnes.

The difference matters because China’s return to the market did not represent a complete restoration of unrestricted exports.

Instead, authorities continued to manage the total volume available to international buyers.

Price floors fell sharply after June

The second major change was price.

The approximately $660/t threshold reported during the initial reopening was significantly above the levels used later in the year.

By September, market reporting indicated minimum FOB prices of roughly $430–440/t for most destinations.

India-bound cargoes were subject to a higher threshold of approximately $500/t FOB.

These figures represent policy-guided minimum export levels reported by market participants, not a universal transaction price for every Chinese urea cargo.

China effectively controls both export volume and export price

The 2026 system gives Chinese authorities two important policy levers.

The first is volume: the amount of urea allowed to leave the domestic market can be controlled through quotas, inspections and approvals.

The second is price: minimum export prices limit the ability of exporters to sell aggressively below international market levels.

Together, the two mechanisms allow China to influence international supply without fully reopening exports on unrestricted commercial terms.

Why China restricts urea exports

China is both a major nitrogen fertilizer producer and one of the world’s largest agricultural economies.

Domestic fertilizer affordability is therefore politically important.

When international urea prices rise sharply, exporters have a stronger incentive to sell abroad. Large export volumes can tighten domestic availability and raise local prices.

Export controls allow authorities to keep more product in China during periods when domestic agricultural supply is considered the priority.

China’s reopening helped push global urea prices lower

The timing of China’s return to exports coincided with a major correction in global nitrogen markets.

In June, India’s National Fertilizers Limited received bids around $445–449/t CFR for a 1.7 million-tonne urea tender.

That was dramatically below the $935–959/t CFR levels paid in a major Indian purchase in April.

Fertilizer Daily reported that suppliers offered roughly 6.25 million tonnes into the June tender, indicating far greater availability than during the spring supply shock.

China’s return was one of several factors behind that improvement. :chatgpt-content-reference{index=”1″}

China was not the only reason urea prices collapsed

It would be wrong to attribute the entire 2026 price correction to Chinese exports.

Several major factors changed simultaneously:

• partial restoration of shipping through the Strait of Hormuz;
• release of previously stranded Middle Eastern cargoes;
• China’s return to exports;
• seasonally weaker Northern Hemisphere demand;
• slower Brazilian buying;
• large supplier participation in Indian tenders.

These factors combined to reverse the extreme supply tightness seen during the first half of 2026.

Urea prices fell sharply from the spring peak

The scale of the correction was substantial.

Fertilizer Daily reported that NOLA urea values had fallen by more than 55% from their April peak by late June.

Urea prices tracked internationally also moved back toward pre-conflict levels after the worst of the Middle East supply disruption eased.

A WTO analysis published in July showed urea prices rising from roughly $400/t before the conflict to more than $850/t in April before falling back toward approximately $453/t in June. :chatgpt-content-reference{index=”2″}

China’s exports became an important source of replacement supply

During the first half of 2026, global urea markets were unusually exposed to disruptions in the Persian Gulf.

The region normally accounts for a large share of globally traded urea.

When shipping through the Strait of Hormuz was disrupted, alternative supply sources became much more valuable.

China’s return to exports therefore provided the market with an additional source of tonnes just as buyers were trying to replace Middle Eastern supply.

India is treated differently from other destinations

India occupies a special position in China’s urea export policy.

It is one of the world’s largest urea importers and can absorb very large cargo volumes through state-linked tenders.

By September, the reported minimum price for India-bound Chinese cargoes was approximately $500/t FOB, higher than the $430–440/t floor used for most other destinations.

This creates a deliberate pricing distinction between India and other export markets.

Why India matters so much to the Chinese export strategy

Indian tenders can rapidly change the global urea balance.

A single large tender may attract several million tonnes of offers from suppliers in China, the Middle East, North Africa, Russia and other exporting regions.

This makes India both an outlet for Chinese production and a competitor for supply available to other import markets.

China’s destination-specific price floor allows authorities to manage how much value exporters capture from this demand.

The 3.3M-tonne quota is still lower than 2025 exports

Even after the reopening, China remained a more constrained exporter than in 2025.

With approximately 3.3 million tonnes of 2026 quota compared with close to 5 million tonnes exported the previous year, the policy effectively removed roughly one-third of potential Chinese export supply relative to 2025.

This helps explain why the reopening was bearish for prices without completely overwhelming the global market.

Why China is a swing supplier in the urea market

China has enough production capacity to materially affect global nitrogen balances when exports are open.

But because authorities can rapidly tighten or loosen export approvals, international buyers cannot treat Chinese availability as fixed.

This gives China a swing-supplier role similar to the influence that temporary production curtailments or export restrictions can have in other commodity markets.

China’s policy can change the global price floor

When Chinese exports are heavily restricted, import markets must rely more heavily on producers in regions such as:

• the Middle East;
• North Africa;
• Russia;
• Southeast Asia;
• Central Asia.

When Chinese tonnes return, buyers gain another major source of supply.

This can pressure marginal producers and traders to reduce offers, particularly during periods of weak seasonal demand.

Why the FOB price floor is not the same as a global urea price

A Chinese FOB floor represents the minimum export price at the Chinese port.

Importers still need to account for:

• ocean freight;
• insurance;
• port costs;
• financing;
• product specification;
• destination-specific duties or taxes.

A $440/t FOB China cargo might therefore arrive at a significantly higher CFR price in India, Brazil or another import market.

FOB and CFR prices should not be compared directly

This distinction is particularly important when comparing Chinese export floors with Indian tender prices.

A $500/t FOB China floor and a $550/t CFR India offer are not necessarily inconsistent because ocean freight is included only in the latter.

Chinese urea policy also affects other nitrogen fertilizers

Urea does not trade in isolation.

Changes in urea availability can influence:

• ammonium sulfate;
• ammonium nitrate;
• UAN;
• ammonia;
• regional nitrogen fertilizer demand.

When urea becomes relatively expensive or scarce, buyers may shift toward alternative nitrogen products where agronomically and commercially possible.

Fertilizer Daily reported in 2026 that Brazilian buyers increased ammonium sulfate use as urea economics deteriorated. :chatgpt-content-reference{index=”3″}

China’s export policy has also affected ammonium sulfate

China is also an important global supplier of ammonium sulfate.

Changes in inspection rules, export controls and domestic industrial output can alter international availability of that product as well.

This means the effects of Chinese fertilizer policy extend beyond granular and prilled urea.

The policy changed market expectations for the second half of 2026

By late spring, traders increasingly expected Chinese exports to weigh on prices.

S&P Global reported on May 27 that the expected 3.3 million-tonne export availability was contributing to bearish urea sentiment even before the full effect of the reopening had reached international markets. :chatgpt-content-reference{index=”4″}

That expectation was largely validated during June and August as additional Chinese availability coincided with weaker global prices.

Prices did not fall in a straight line

The market remained highly volatile.

After the June correction, urea prices rebounded in July when renewed Middle East disruption again threatened supply.

ICIS reported in mid-July that roughly 850,000 tonnes of urea had become stranded in Iran and the Arab Gulf, triggering renewed price strength even while Chinese exports remained an important supply factor. :chatgpt-content-reference{index=”5″}

This shows that Chinese exports are important but cannot fully offset a major disruption in the Persian Gulf.

Prices weakened again in August

By August, the balance turned bearish again.

Fertilizer Daily reported urea at approximately $386/t on August 11, down more than 7% over the month.

The decline reflected improving supply conditions, including Chinese quota releases and reduced fears around Middle East availability. :chatgpt-content-reference{index=”6″}

What China’s 2026 policy means for buyers

For importers, the biggest change is that Chinese urea is again available, but availability remains managed.

Buyers therefore need to monitor three variables simultaneously:

• remaining export quota;
• minimum FOB price;
• destination-specific restrictions.

A change in any one of these can alter the effective supply available to the international market.

What China’s policy means for producers outside China

Chinese exports increase competition for producers in regions such as the Middle East, North Africa and Russia.

When the Chinese floor is low enough to compete in major import markets, other suppliers may need to adjust offers or redirect cargoes.

When China restricts exports or raises its minimum price, those producers gain greater pricing power.

China still prioritizes domestic fertilizer security

The broader lesson from 2026 is that Beijing has not returned to a fully liberal export regime.

The government continues to treat fertilizer as a strategically important agricultural input.

Export availability therefore remains subordinate to domestic supply and affordability objectives.

That means future changes in Chinese crop economics, domestic urea prices or inventories could trigger another policy adjustment.

What to watch next

The most important variables for the remainder of 2026 and the 2027 season include:

• how much of the 3.3 million-tonne quota is actually exported;
• whether the quota is increased or reduced;
• changes to the $430–440/t general FOB floor;
• changes to the India-specific floor;
• Chinese domestic urea inventories;
• India’s next major import tender;
• Middle East shipping conditions;
• European nitrogen demand;
• Chinese policy for 2027.

Frequently asked questions

Sources: S&P Global, ICIS, Fertilizer Daily