Australia Urea Market Size and Forecast 2025–2033
Growing Agricultural Demand, Government Fertilizer Security Initiatives, and Livestock Feed Applications to Drive Steady Market Expansion
Australia Urea Market Overview
The Australian Urea Market is anticipated to reach US$ 1,814.20 million in 2033, up from US$ 1,191.73 million in 2024, growing at a CAGR of 4.78% during 2025–2033, according to Renub Research. This growth is being driven by increasing demand from the agricultural sector for high-nitrogen fertilizers, expanding grain and crop cultivation, and rising government incentives for sustainable farming practices. Import substitution policies and growing interest in domestic production capabilities are also shaping market dynamics.
Urea is a nitrogen-rich chemical compound (CO(NH₂)₂) that contains around 46% nitrogen, making it one of the most concentrated and cost-effective nitrogen fertilizers globally. In Australia, urea plays a critical role in boosting productivity across major agricultural segments including grain farming, pasture development, and horticulture. Its popularity stems from affordability, ease of application, and proven ability to increase crop yields efficiently.
Beyond agriculture, urea is also widely used in industrial processes such as the manufacture of resins and plastics, as well as in diesel exhaust fluid (AdBlue), which reduces harmful vehicle emissions. With rising food demand, climate-conscious farming practices, and ongoing supply chain concerns, urea remains a strategic input for Australian agriculture and industry. While Australia continues to depend heavily on imports, increasing policy discussions around domestic manufacturing and storage infrastructure are expected to support long-term market stability.
Growth Drivers in the Australia Urea Market
Increasing Demand from the Agricultural Sector
Agriculture remains the backbone of Australia’s urea market. The country’s strong reliance on grain production, livestock grazing, and horticulture has positioned urea as the most widely used nitrogen fertilizer across farms of all sizes. Its high nitrogen content, cost efficiency, and ease of transportation make it especially attractive for broadacre farming.
As global food demand continues to rise, Australian farmers are under pressure to improve productivity while maintaining soil health. Urea plays a central role in enhancing soil fertility, boosting crop growth, and supporting sustainable intensification of farmland. The expansion of wheat, barley, canola, and pasture cultivation across major farming regions has led to consistent growth in urea consumption, reinforcing its importance as a foundational agricultural input.
Government Support for Fertilizer Security and Sustainability
In response to global supply disruptions and rising fertilizer costs, the Australian government has prioritized fertilizer security and sustainable nutrient management. Policies aimed at reducing reliance on imports, improving storage and logistics, and encouraging domestic production are creating a more resilient urea supply chain.
National initiatives such as the National Soil Strategy and various agri-innovation funding programs promote responsible fertilizer usage while improving long-term productivity. These efforts encourage precision agriculture, better nutrient planning, and environmentally conscious application methods.
In August 2024, the Australian Farm Institute (AFI) received a US$ 638,000 government grant to support international collaboration on sustainable agriculture. The funding is intended to develop trade standards and climate-aligned production practices, further reinforcing the government’s commitment to balancing agricultural productivity with environmental stewardship. Such initiatives indirectly strengthen urea demand by promoting efficient fertilizer utilization across the farming sector.
Growth of Livestock and Feed Industries
Australia’s expanding livestock industry is another key driver of urea demand. In animal nutrition, urea is used as a non-protein nitrogen source in ruminant diets, particularly for cattle in arid and semi-arid regions where pasture quality is often poor. Urea supplementation improves microbial protein synthesis in the rumen, enhancing digestion of low-quality forage and boosting animal productivity.
With rising domestic and export demand for beef and dairy products, livestock producers are increasingly adopting cost-effective feed additives. Urea also contributes indirectly by improving pasture regrowth and the nutritional quality of forage crops.
In August 2024, Australian company Food Recycle raised US$ 3 million to scale technology that converts commercial food waste into animal feed, reducing landfill waste and greenhouse gas emissions. This initiative reflects a broader trend toward sustainable livestock nutrition, where urea continues to play a supporting role in enhancing feed efficiency within environmentally responsible systems.
Challenges in the Australia Urea Market
Heavy Dependence on Imports and Global Price Volatility
Australia remains heavily dependent on imported urea, primarily from the Middle East and Southeast Asia. This reliance exposes the domestic market to international price fluctuations, geopolitical disruptions, shipping delays, and currency movements. Periods of global supply shortages or high freight costs can quickly translate into higher fertilizer prices for farmers.
The absence of large-scale domestic manufacturing capacity limits Australia’s ability to stabilize supply and pricing during periods of global uncertainty. For farmers, fertilizer price spikes directly impact production costs and profitability, particularly in price-sensitive grain and livestock operations. Strengthening local production, diversifying import sources, and investing in strategic reserves remain critical priorities for ensuring long-term market resilience.
Environmental and Regulatory Constraints
While urea is indispensable for agricultural productivity, improper or excessive application can lead to environmental challenges such as nitrogen runoff, greenhouse gas emissions, and soil degradation. In response, regulatory oversight of fertilizer usage is increasing, with greater emphasis on nutrient management plans, emissions reduction, and waterway protection.
Farmers are being encouraged to adopt precision farming techniques, controlled-release formulations, and best-practice application methods. Although these measures are essential for sustainable agriculture, they may increase operational costs and require investments in new technologies and training. Balancing productivity with environmental responsibility remains an ongoing challenge for the Australian urea market.
Australia Fertilizer Grade Urea Market
Fertilizer-grade urea represents the largest share of the Australian urea market, driven by widespread use in crop cultivation and pasture management. Its high nitrogen concentration and compatibility with blended fertilizers make it a preferred choice for broadacre farmers.
This grade is commonly applied in solid or liquid form and is frequently integrated into nutrient management programs for major crops such as wheat, barley, and canola. Government incentives supporting soil health, precision agriculture, and efficient fertilizer use further reinforce demand. As national priorities increasingly focus on food security and productivity, fertilizer-grade urea is expected to experience steady growth throughout the forecast period.
Australia Agriculture Urea Market
Agriculture remains the dominant end-use sector for urea in Australia. Farmers rely on urea to improve soil fertility, enhance crop yields, and support pasture regeneration. It is particularly important in nitrogen-deficient soils common across wheatbelt regions and in conservation agriculture systems.
Seasonal factors such as rainfall patterns and cropping cycles strongly influence application rates, but long-term demand remains stable. With increasing emphasis on sustainable intensification—producing more food from limited land while preserving environmental quality—urea continues to be a cornerstone input for Australian agriculture.
Australia Animal Feed Urea Market
In animal nutrition, urea is widely used in ruminant diets as a non-protein nitrogen source. It enhances the digestibility of crop residues and low-quality forage, making it especially valuable during drought conditions or in dry grazing regions.
Feed-grade urea is subject to strict regulations to ensure safe dosing and proper use. With the expansion of feedlot operations, rising meat exports, and ongoing efforts to improve feed efficiency, urea’s role in animal nutrition is becoming increasingly prominent within Australia’s livestock sector.
Regional Outlook: State-Wise Urea Market Trends
New South Wales (NSW)
New South Wales is a major consumer of urea due to its extensive wheat, barley, sheep, and cattle production. Seasonal rainfall variability drives the need for strategic nitrogen management. State-level sustainability programs and strong logistics infrastructure support consistent fertilizer distribution, making NSW a key market for urea suppliers.
Victoria
Victoria’s urea market is supported by intensive dairy farming, horticulture, and high-value crop production. Urea is widely used for pasture renewal, silage preparation, and fertigation in vegetable and fruit cultivation. The state’s strong focus on sustainability and nutrient efficiency has encouraged adoption of precision agriculture technologies, reinforcing steady demand.
South Australia
South Australia’s dryland agriculture sector relies heavily on nitrogen fertilizers to sustain cereal crops such as wheat, oats, and barley. Low rainfall and nutrient-poor soils necessitate targeted fertilizer application. Government extension programs and research institutions promote best-practice nutrient management, ensuring consistent usage of fertilizer-grade urea.
Queensland
Queensland is one of Australia’s largest urea markets due to its diverse agricultural profile, including sugarcane, cotton, grains, and livestock. Sugarcane cultivation, in particular, requires high nitrogen inputs, while multiple growing seasons drive frequent fertilizer application. Urea is also widely used in pasture development and feedlot operations, supported by state-backed nutrient management initiatives.
Market Segmentation
By Type:
Technical Grade
Fertilizer Grade
Feed Grade
By Application:
Agriculture
Chemical Synthesis
Animal Feed
Others
By States:
New South Wales
Victoria
Queensland
Western Australia
South Australia
Australian Capital Territory
Tasmania
Northern Territory
Competitive Landscape
The Australian urea market features a mix of global chemical manufacturers and agribusiness leaders. Each company has been analyzed across five key viewpoints: overview, key personnel, recent developments, SWOT analysis, and revenue performance.
Key Players Include:
BASF SE
Petrobras
SABIC
Bunge Limited
Nutrien Ltd.
Sasol
CF Industries Holdings Inc.
These companies are actively investing in supply chain efficiency, sustainable production practices, and strategic partnerships to strengthen their position in the Australian market. Growing interest in domestic manufacturing and environmentally responsible fertilizers is expected to reshape competitive strategies over the coming decade.
Final Thoughts
The Australia Urea Market is set for steady and sustainable growth through 2033, underpinned by rising agricultural demand, supportive government policies, and expanding livestock and feed industries. While challenges such as import dependence and environmental regulations persist, the market is evolving through precision agriculture, sustainability initiatives, and strategic investments in fertilizer security.
With agriculture remaining central to Australia’s economy and food systems, urea will continue to play a pivotal role in enhancing productivity, improving soil health, and supporting climate-conscious farming practices. As policymakers, agribusinesses, and farmers work together to build a more resilient fertilizer supply chain, the Australian urea market is well-positioned to deliver long-term value and stability in a rapidly changing global agricultural landscape.
About the Creator
Marthan Sir
Educator with 30+ years of teaching experience | Passionate about sharing knowledge, life lessons & insights | Writing to inspire, inform, and empower readers.
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