Indonesia ships first urea cargo to Australia under government-to-government deal

Indonesia shipped its first urea cargo to Australia under a government-to-government supply deal, dispatching 47,250 tonnes from Bontang on May 14 as Canberra moves to diversify nitrogen sourcing away from the disrupted Gulf supply.

The cargo, produced by state holding company Pupuk Indonesia, is the first installment of 250,000 tonnes pledged under the bilateral framework. Jakarta plans to expand the commitment to 500,000 tonnes, a volume worth roughly $398M, according to Indonesian Minister of Agriculture Andi Amran Sulaiman.

Indonesia is the world’s fourth-largest urea producer, targeting 7.8 million tonnes of output in 2026 against domestic demand of about 6.3 million tonnes, leaving an export surplus of about 1.5 million tonnes. Pupuk Indonesia reported domestic stocks of 1.1 million tonnes.

The arrangement marks a shift from spot sales tenders toward longer-term, state-brokered offtake. Indonesia exported 1.72 million tonnes of urea in 2025, up from 1.41 million tonnes in 2024. A separate deal with Malaysia’s Petronas covers up to 300,000 tonnes per year under a long-term agreement.

Execution risk centers on scaling to the 500,000-tonne target without straining subsidized domestic supply, which the government has expanded sharply over the past year.

Source: Profercy