Australia Urea Market Forecast 2025–2033

According to Renub Research Australia Urea Market is projected to grow from US$ 1,191.73 million in 2024 to US$ 1,814.20 million by 2033, registering a CAGR of 4.78% from 2025 to 2033. This steady expansion is fueled by the rising demand for high-nitrogen fertilizers, the rapid growth of grain and crop cultivation, increasing investments in sustainable agriculture, and government initiatives supporting fertilizer security. As Australia continues strengthening its domestic food production capacity while managing global supply chain risks, urea remains one of the most indispensable agricultural inputs in the country.

Australia Urea Market Overview

Urea (CO(NH₂)₂) is one of the most widely used nitrogen fertilizers worldwide due to its high nitrogen concentration of 46%, making it the most efficient and cost-effective nutrient source for crops. In Australia, urea plays a central role in enhancing soil fertility, supporting large-scale crop cultivation, and improving pasture growth for livestock.

While agriculture is its primary application, urea also supports several industrial sectors, including:

·        Resins and plastics manufacturing

·        Diesel Exhaust Fluid (AdBlue) production for emission reduction

·        Chemical synthesis processes

Australia relies heavily on urea imports, making the market sensitive to global supply chain disturbances, price fluctuations, and geopolitical risks. However, rising discussions around strengthening local production capacity, improving fertilizer storage systems, and encouraging sustainable nutrient management are shaping a more resilient market outlook for the coming decade.

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Key Growth Drivers of the Australia Urea Market

Increasing Demand from the Agricultural Sector

Agriculture remains the main pillar of urea consumption in Australia. Broadacre crops such as wheat, canola, sugarcane, cotton, and barley rely heavily on nitrogen fertilization, and urea continues to be the preferred option due to its affordability and effectiveness.

Key factors strengthening demand include:

·        Growing global food requirements pushing Australia to boost crop productivity

·        Nutrient-depleted soils requiring nitrogen replenishment

·        Expansion of cropping areas across New South Wales, Queensland, Victoria, and South Australia

·        Farmers adopting modern fertilization techniques to achieve higher yields

As sustainable food production becomes increasingly important, urea remains a vital component in optimizing land productivity and supporting the agriculture-driven economy.

Government Support for Fertilizer Security and Sustainable Agriculture

To reduce reliance on international suppliers and ensure long-term fertilizer availability, the Australian government is investing in:

·        Domestic fertilizer manufacturing capabilities

·        Improved logistics and strategic storage

·        Support programs under the National Soil Strategy

·        Research initiatives promoting efficient nutrient use

In August 2024, the Australian Farm Institute secured a $638,000 grant to lead international collaboration on sustainable agriculture practices. Such initiatives aim to improve nutrient management, reduce greenhouse emissions, and support farmers in adopting precision farming systems.

Government involvement is becoming a major catalyst for stabilizing urea availability and promoting responsible usage.

Growth of Livestock and Animal Feed Industries

Urea is widely used in ruminant feed as a non-protein nitrogen (NPN) source, essential for microbial protein synthesis in cattle and sheep. This is especially valuable in dry regions where pasture quality is poor.

Demand is rising due to:

·        Expansion of the beef and dairy export industries

·        Growing feedlot operations

·        Interest in cost-effective feed supplements

Additionally, innovations in animal feed are supporting market growth. For example, in August 2024, Food Recycle Australia raised USD 3 million to commercialize technology that converts food waste into nutrient-rich animal feed, indirectly boosting demand for nitrogen supplements like urea.

Challenges in the Australia Urea Market

Heavy Dependence on Imports and Global Price Volatility

Australia imports most of its urea from the Middle East and Southeast Asia, creating risks such as:

·        Sudden price fluctuations

·        Transport delays

·        Exposure to geopolitical tensions

·        Currency exchange volatility

These risks can significantly impact farmers’ fertilizer budgets and overall production costs. The absence of large-scale domestic urea manufacturing underscores the need for diversification and local investment.

Environmental and Regulatory Constraints

Excessive or improper urea application may result in:

·        Nitrogen runoff affecting water bodies

·        Greenhouse gas emissions (nitrous oxide)

·        Soil quality degradation

As a result, regulations encouraging precision application, proper storage, and environmentally safe practices are increasing. While these regulations are necessary, they may raise operational costs and require training or new technologies, adding complexity for farmers.

Australia Fertilizer Grade Urea Market

Fertilizer-grade urea represents the largest segment of the overall urea market in Australia. Farmers prefer this grade because of:

·        High nitrogen content

·        Easy mixing with other fertilizers

·        Suitability for both solid and liquid forms

·        Application flexibility in diverse cropping systems

It is particularly crucial for crops like wheat, canola, and barley. With rising adoption of precision agriculture tools—such as nutrient sensors, soil mapping, and fertigation systems—the fertilizer-grade urea segment is expected to maintain strong, consistent growth.

Australia Agriculture Urea Market

Agriculture accounts for the majority of Australia’s urea consumption. Applications include:

·        Improving soil fertility

·        Supporting broadacre grain production

·        Enhancing pasture regrowth for livestock

·        Strengthening root development and crop resilience

Seasonal rainfall patterns and cropping cycles significantly influence urea application rates. As sustainable intensification becomes a priority, demand for balanced nutrient management—including nitrogen—continues to rise.

Australia Animal Feed Urea Market

Feed-grade urea is commonly used in the diets of ruminants such as cattle and sheep.

Its benefits include:

·        Enhanced digestion of low-quality forage

·        Cost-effective protein supplementation

·        Increased feed efficiency

Given Australia’s large cattle population and growing feedlot capacity, feed-grade urea demand is poised to increase steadily, especially in drought-prone areas where natural forage is insufficient.

State-Level Market Insights

New South Wales Urea Market

NSW is one of Australia’s largest consumers of urea due to:

·        Extensive wheat and barley production

·        Large sheep and cattle populations

·        Strong agricultural logistics infrastructure

Sustainable farming programs in NSW further encourage efficient nitrogen use.

Victoria Urea Market

Victoria’s demand is driven by:

·        A strong dairy sector

·        High-intensity horticulture

·        Year-round pasture renewal

Precision agriculture and fertigation are becoming increasingly prevalent, optimizing fertilizer performance across the state.

South Australia Urea Market

South Australia’s dryland farming relies heavily on urea for cereal cultivation. Due to poor soil conditions and low rainfall:

·        Pre-seeding and top-dressing applications are common

·        Farmers depend on research-backed strategies for maximizing nitrogen efficiency

This maintains steady demand for fertilizer-grade urea.

Queensland Urea Market

Queensland has one of the most diverse agricultural profiles, with major crops including:

·        Sugarcane

·        Cotton

·        Grains

Sugarcane alone requires substantial nitrogen inputs, making urea vital for yield optimization. The state’s tropical climate allows multiple cropping cycles, further increasing fertilizer application frequency.

Pasture development and cattle feedlot expansion contribute additional demand.

Market Segmentation

By Type

·        Technical Grade

·        Fertilizer Grade

·        Feed Grade

By Application

·        Agriculture

·        Animal Feed

·        Chemical Synthesis

·        Others

Top Consuming States

·        New South Wales

·        Victoria

·        Queensland

·        Western Australia

·        South Australia

·        Tasmania

·        Australian Capital Territory

·        Northern Territory

Key Players in the Australia Urea Market

·        BASF SE

·        Petrobras

·        SABIC

·        Bunge Limited

·        Nutrien Ltd.

·        Sasol

·        CF Industries Holdings Inc

These companies are actively engaging in production expansions, sustainability initiatives, supply chain optimization, and advanced nutrient technology developments.

Conclusion

The Australia Urea Market is positioned for robust growth through 2033, driven by agricultural expansion, government support, sustainable farming initiatives, and the evolving livestock industry. Despite challenges such as heavy import dependency and environmental constraints, ongoing investments in domestic production, precision nutrient management, and innovative feed technologies are shaping a more stable and efficient market.

Urea will continue to play a critical role in enabling Australia to meet rising food production demands while transitioning toward more sustainable agricultural systems.