Urea Market Growth (USD 99.3 Bn by 2033 at 3.2% CAGR)

Updated · Nov 14, 2024

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Table of Contents

Introduction
Key Takeaways
Urea Statistics
Emerging Trends
Use Cases
Major Challenges
Market Growth Opportunities
Recent Development
Conclusion

Introduction

The global Urea Market is anticipated to experience significant growth over the next decade, projected to expand from USD 72.5 Billion in 2023 to USD 99.3 Billion by 2033, with a steady CAGR of 3.2%.

This growth is primarily fueled by the increasing demand for nitrogen-rich fertilizers in the agriculture sector, driven by the rising global population and the need to enhance crop yields. Asia-Pacific is expected to continue dominating the market, supported by substantial agricultural activities and government subsidies encouraging fertilizer use.

Moreover, urea’s application extends beyond agriculture into industries such as automotive, where it is used to reduce nitrogen oxide emissions, and pharmaceuticals, enhancing its market popularity. Market expansion opportunities are also being supported by advancements in production technologies like Blue Urea, which offers environmental benefits over traditional methods. Despite challenges such as fluctuating raw material costs and environmental concerns related to excessive urea use, the market outlook remains positive, underpinned by technological innovations and the increasing adoption of smart farming techniques.

Key Takeaways

Market Size and Growth: Expected to reach USD 99.3 billion by 2033, growing at 3.2% CAGR from USD 72.5 billion in 2023.
Above 95% purity dominated the market in 2023, capturing over 42.2% share.
Fertilizer Grade held the largest market share in 2023, accounting for more than 48.6%.
Agriculture dominated with over 68.2% market share in 2023.
The fertilizer segment held a dominant position with more than 65.5% market share in 2023.
Asia Pacific region emerges as a dominant force in the urea market, boasting a substantial market share of 43.3%.

Urea Statistics

India exports of Urea was USD 40,420.18K and quantity 74,868,100Kg.
IFFCO ranked no. 1 in the country with a production of 4.68 million tons urea, NFL ranked 2nd with 3.8 million tons urea, and Chambal Fertilisers with 3.35 million tons urea ranked 3rd.
The farm-gate price of urea is fixed at Rs 4,600 per tonne. For every tonne of urea sold to the farmer, the government bears a subsidy of more than Rs 4,100.
The agricultural industry widely uses urea, a white crystalline solid containing 46% nitrogen, as an animal feed additive and fertilizer.
As little as 0.25 inches of rainfall is sufficient to blend urea deep enough into the soil so ammonia losses won’t occur.
The problem is the NH3, because it’s a gas. However, if it’s incorporated, it acts the same as incorporated anhydrous ammonia. Also, half of 28% liquid N is urea.
you can generally apply 10 pounds of nitrogen as urea with the grain drill at seeding time, even under dry conditions.
You can apply 20 pounds of nitrogen as urea with the grain drill.
Urea can be bulk-spread, either alone or blended with most other fertilizers. It’s recommended that the spreading width not exceed 50 feet when combined with other fertilizer materials.
A solution of 50% urea by weight results in 23-0-0 and has a salting-out temperature of 60 degrees Fahrenheit.
Most U.S. urea manufacturers keep biuret content low by keeping high temperatures to a minimum. Biuret content is typically around 0.3%, although urea of foreign origin appears to be higher.
High heat is normal during urea manufacturing. If heat exceeds 200 degrees Fahrenheit, there’s a slight conversion of urea to biuret.
Research indicates that urea should contain no more than 0.25% biuret for use in foliar sprays. For many crops, the quantity of nitrogen applied at one time shouldn’t exceed 20 pounds of nitrogen per acre.
Also, don’t store urea with ammonium nitrate. When in contact, these materials rapidly absorb water when the relative humidity is above 18%.

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Emerging Trends

Increased Use in Environmental Applications: There is a growing trend of using urea in environmental applications, such as in the automotive industry for reducing nitrogen oxide emissions through systems like AdBlue.
Advancements in Production Technologies: Innovations like Blue Urea production, which utilizes renewable energy sources for manufacturing, are becoming more popular due to their reduced environmental impact.
Rising Demand in Non-Agricultural Sectors: Beyond its traditional use in agriculture, urea is increasingly used in various industrial processes, pharmaceuticals, and cosmetics, expanding its market reach and utility.
Smart Farming Integration: The integration of urea-based fertilizers with smart farming technologies that optimize fertilizer application to enhance efficiency and crop yield is gaining traction.
Bio-based and Biodegradable Variants: Research and development into bio-based and biodegradable urea variants are advancing, driven by environmental sustainability goals and regulatory pressures.

Use Cases

Agricultural Fertilizer: Urea is predominantly used as a nitrogen-rich fertilizer, crucial for plant growth. It is one of the most common forms of nitrogen fertilizer globally due to its high nitrogen content (46% N), cost-effectiveness, and solid state which makes it easy to store and transport. The global consumption of nitrogen fertilizers, including urea, is expected to continue growing, driven by the need to increase crop yields to feed the rising population.
Diesel Exhaust Fluid (DEF): Urea is a primary component in the production of DEF, used in modern diesel engines to reduce nitrogen oxide emissions. DEF, commonly referred to as AdBlue in some markets, is injected into the exhaust stream of diesel vehicles, where it helps convert nitrogen oxides into harmless nitrogen and water, thereby reducing air pollution. This application is becoming increasingly significant with stricter environmental regulations aimed at lowering vehicle emissions.
Industrial Applications: Urea is used in the chemical industry for the production of plastics, resins, and adhesives. It is particularly important in the manufacture of urea-formaldehyde resins, which are widely used in particleboard, plywood, and various molding compounds. These resins are favored for their high adhesive strength and moisture resistance.
Cosmetic and Pharmaceutical Products: In the pharmaceutical and cosmetics industries, urea is valued for its moisturizing properties. It is used in topical dermatological products to promote rehydration of the skin, making it a common ingredient in lotions, creams, and ointments. It also serves medicinal purposes in dermatology, particularly for treating dry skin conditions and keratosis
Precedence Research.
Animal Feed: Urea can be used as a cost-effective protein supplement in ruminant animal feeds. It provides a source of nitrogen that helps in the microbial production of protein in the rumen, which is essential for the growth and health of the animals. This application is critical in regions where natural protein sources are expensive or scarce.

Major Challenges

Volatility in Raw Material Prices: Urea production is heavily dependent on natural gas as a key raw material. Natural gas accounts for around 70-90% of the cost of urea production. Due to the fluctuating prices of natural gas, especially in regions like Europe and Asia, urea manufacturers are often faced with unpredictable production costs. For instance, natural gas prices saw significant volatility in 2022, with European gas prices surging more than 500% in some regions due to geopolitical tensions and supply concerns.
Environmental Concerns and Regulatory Pressure: The environmental impact of urea fertilizers, particularly nitrogen emissions, has become a major concern. Urea, when applied to soil, can release nitrous oxide (N2O), a potent greenhouse gas. As governments and international bodies push for stricter environmental regulations to reduce carbon footprints, urea producers may face increasing pressure to adopt cleaner production processes.
Supply Chain Disruptions: The global fertilizer market, including urea, is vulnerable to supply chain disruptions. These disruptions can arise from a variety of factors such as geopolitical instability, logistical bottlenecks, and trade restrictions. For example, the 2022 conflict between Russia and Ukraine led to significant disruptions in the supply of urea, as Russia is one of the world’s largest urea exporters.
Price Sensitivity and Demand Fluctuations: Urea is primarily used as a nitrogen fertilizer, and its demand is closely tied to global agricultural production cycles. In years of low crop yields, farmers may reduce the amount of fertilizer applied to crops, thereby reducing overall demand for urea. Conversely, in times of high crop production, demand can increase.
Competition from Alternative Fertilizers: The growing interest in sustainable agriculture and organic farming has led to increased competition from alternative fertilizers, such as bio-based or slow-release fertilizers. These alternatives are gaining popularity due to their perceived environmental benefits, which could reduce demand for synthetic fertilizers like urea.
Rising Energy Costs and Infrastructure Issues: Energy costs, particularly electricity and natural gas, represent a significant portion of urea production costs. Increases in energy prices, particularly due to geopolitical instability, have a direct impact on urea production. Additionally, the aging infrastructure of some urea plants in certain regions may result in inefficiencies and higher operational costs.

Market Growth Opportunities

Increasing Global Demand for Food and Agriculture: The growing global population and the need to increase food production have created a sustained demand for agricultural fertilizers, including urea. According to the UN, the global population is expected to reach nearly 9.7 billion by 2050, driving the need for increased agricultural output. To meet the food demand, farmers are increasingly relying on synthetic fertilizers like urea, which enhances soil nitrogen content and boosts crop yields.
Adoption of Advanced Fertilizer Technologies: Technological advancements in fertilizer production are presenting opportunities to enhance efficiency and reduce environmental impact. One such opportunity is the development of slow-release urea fertilizers, which release nitrogen at a controlled rate, reducing nitrogen loss to the environment. This technology can improve the sustainability of urea fertilizers by reducing leaching and volatilization, making them more environmentally friendly.
Expanding Use of Urea in Industrial Applications: Apart from agriculture, urea has numerous industrial applications, especially in the production of resins, adhesives, and plastics. Urea is also used in the automotive industry for Selective Catalytic Reduction (SCR) technology, which helps reduce nitrogen oxide (NOx) emissions from diesel engines. The growth of industrial sectors, especially in emerging economies, is expected to boost the demand for urea in non-agricultural uses.
Government Initiatives for Fertilizer Accessibility: Governments in both developing and developed nations are increasingly focused on improving agricultural productivity to ensure food security. In countries like India and Africa, where the agricultural sector is critical to the economy, government initiatives to provide subsidies or financial support for fertilizer purchases are helping boost urea demand. These policies help small-scale farmers access fertilizers at affordable rates.
Opportunities in Emerging Markets: In countries such as India, China, and Brazil, where agriculture plays a vital role, government subsidies and investments in rural infrastructure can increase the availability and consumption of urea-based fertilizers. For example, in India, the government spends more than USD 10 billion annually on fertilizer subsidies, and urea remains a significant portion of the total fertilizer consumption.
Sustainability and Green Chemistry Innovation: Environmental concerns and climate change have spurred the development of green chemistry alternatives to traditional urea production methods, such as carbon capture and storage (CCS) technologies in ammonia and urea production. Moreover, there is growing interest in using urea as a part of circular economy strategies, where urea is recycled from industrial waste streams.
Increased Agricultural Awareness in Emerging Economies: The rise in agricultural awareness and improved farming practices in emerging economies is also a key driver for urea demand. Farmers in countries like India, Brazil, and Southeast Asia are increasingly turning to modern fertilizers to increase yield per hectare. This is particularly true for staple crops like rice, wheat, and corn, where urea-based fertilizers are commonly used to enhance nitrogen content in soil.

Recent Development

Yara International ASA stands as a major player in the global urea market, leveraging its substantial production capacity to meet diverse industrial and agricultural needs. The company’s manufacturing facilities are strategically located across several continents, including significant operations in Europe, the Americas, and Asia, ensuring a reliable supply of high-quality urea for its global clientele. Yara’s focus extends beyond just production; the company is deeply invested in sustainability and innovation within the agricultural sector, aiming to offer solutions that support efficient crop nutrition while minimizing environmental impact. Their commitment is evident in their continuous efforts to optimize production processes and enhance product quality, ensuring they meet the evolving demands of the industry.

Saudi Basic Industries Corporation (SABIC) is a powerhouse in the petrochemical manufacturing industry, including the production of urea. Known for its robust production capabilities, SABIC operates state-of-the-art facilities that produce urea largely used for agricultural fertilizers, helping to support global food production. The company’s focus on integrating advanced technologies and processes demonstrates its commitment to sustainability and efficiency. SABIC’s strategic initiatives also emphasize global expansion and operational optimization, which are critical in maintaining its position as a leading provider in the competitive urea market.

Qatar Fertiliser Company (QAFCO) is renowned for being a leading urea producer in the Middle East, with its operations pivotal to Qatar’s industrial and economic landscape. The company specializes in the production of ammonia and urea, focusing on leveraging Qatar’s natural gas resources. QAFCO’s urea production is marked by its high-volume output, contributing significantly to the global supply chain, particularly in markets that demand high-quality agricultural fertilizers. Their production facilities are among the largest of their kind, showcasing advanced technological implementations that enhance production efficiency and environmental compliance.

OCI NV is a global nitrogen fertilizer producer with significant contributions to the urea market. The company’s production facilities are spread across key regions, including Europe, the Americas, and the Middle East, ensuring a broad operational footprint. OCI NV is focused on high-capacity production to meet the substantial global demand for urea, particularly for agricultural applications. The company’s strategic approach includes expanding its production capacity and enhancing supply chain efficiencies, which are crucial for maintaining competitive advantage in the rapidly evolving global market.

CF Industries Holdings, Inc. is a prominent producer of ammonia and ammonia-derived products such as urea and urea ammonium nitrate solutions. The company prides itself on having the largest ammonia production capacity globally, emphasizing safety and operational excellence. CF Industries leverages its access to low-cost North American natural gas, which significantly reduces production costs and enhances its competitive edge in the urea market. Its strategic positioning in North America, coupled with robust distribution capabilities, ensures efficient delivery and strong market presence. Additionally, CF’s commitment to sustainability and environmental stewardship is evident in its clean energy initiatives and decarbonization efforts.

EuroChem Group AG is a global player in the agrochemical sector, producing a wide range of fertilizers, including urea. The company operates extensive production facilities and benefits from its vertically integrated supply chain, enhancing its efficiency and market responsiveness. EuroChem is known for its innovation in high-efficiency fertilizers, which supports sustainable agricultural practices. Its global distribution network ensures that its products reach a broad market, supporting farmers worldwide in achieving higher crop yields and more sustainable farming.

Nutrien AG is a key figure in the agricultural sector, particularly noted for its significant contributions to the global urea market. As a leading provider of crop inputs and services, Nutrien AG has a comprehensive product lineup that includes nitrogen-based fertilizers such as urea. The company’s extensive retail network, which is one of the largest in the world, provides a strong distribution channel for its urea products, ensuring they meet the demand of farmers globally. Nutrien also focuses on sustainable agricultural practices, offering solutions that enhance both crop yield and environmental conservation.

Koch Fertilizer, LLC is part of the larger Koch Industries, Inc. and is a recognized producer and marketer of a range of fertilizers, including urea. The company’s operations span global markets, backed by a robust supply chain and distribution network that enhances its market reach and customer service capabilities. Koch Fertilizer is committed to safety and environmental stewardship, continually seeking ways to innovate and improve its products and processes to support sustainable agriculture.

Coromandel International Limited is a leading fertilizer manufacturer in India, known for its extensive range of agrochemical products, including urea. The company’s commitment to sustainability is evident in its integrated nutrient management approach, which seeks to balance the efficiency of fertilizer use with environmental considerations. Coromandel’s strong domestic market presence is supported by a well-established distribution network that ensures its products are readily available to farmers across the region.

Acron Group is a prominent Russian chemical conglomerate with significant activities in the production of mineral fertilizers, including urea. The company’s vertical integration strategy ensures control over its supply chain, from raw material extraction to final product delivery, which enhances efficiency and market responsiveness. Acron’s commitment to innovation is demonstrated through its continuous improvement of product quality and its adoption of environmentally friendly technologies.

Chambal Fertilisers and Chemicals Ltd is one of India’s leading urea producers, known for its high-quality products that support the agricultural sector. The company operates state-of-the-art manufacturing facilities that employ advanced technologies to ensure high efficiency and low environmental impact. Chambal Fertilisers is committed to enhancing farmer productivity through not only its urea products but also through comprehensive agricultural solutions and services.

Uralchem Group is a key player in the global fertilizer industry, headquartered in Russia. The company specializes in the production of urea and other nitrogen fertilizers, focusing on high efficiency and environmental sustainability. Uralchem’s production facilities are among the most modern and technologically advanced, allowing for high-quality products that meet stringent international standards. The company’s strategic focus on innovation and sustainability makes it a competitive participant in the global urea market.

Conclusion

The Urea Market is poised for steady growth, driven by its critical role in agriculture and expanding applications across various industries. As the primary nitrogen fertilizer, urea is essential for meeting the global food demand, which is surging in line with the growing population. Its role extends beyond agriculture into reducing vehicle emissions through products like diesel exhaust fluid, which is becoming increasingly vital due to stricter environmental regulations.

Additionally, the versatility of urea is evident in its use in manufacturing plastics, cosmetics, and pharmaceuticals, where its properties enhance product functionality. With ongoing advancements in production technologies and the potential development of more environmentally friendly urea variants, the market is expected to continue expanding. Thus, urea remains a fundamental substance that supports sustainable agricultural practices and contributes to various industrial processes, underscoring its enduring demand and significance in the global market.