Global Prilled Urea Market Size, Share, and Forecasts to 2031

Key Findings

• Prilled urea is a granular, solid nitrogen fertilizer containing 46% nitrogen, making it one of the most widely used fertilizers globally.

• It is manufactured through the prilling process, where molten urea is solidified into spherical prills.

• The agricultural sector is the largest consumer, particularly for cereal crops such as rice, wheat, and maize.

• Beyond fertilizers, prilled urea is also used in animal feed, resins, adhesives, plastics, and pharmaceuticals.

• Asia-Pacific dominates consumption, led by China, India, and Southeast Asian countries.

• The market is highly sensitive to natural gas prices, as natural gas is the primary feedstock for urea production.

• Logistics and transportation advantages make prilled urea competitive in bulk trading.

• Global population growth and food security concerns are major long-term demand drivers.

• Governments often intervene with subsidies, price caps, and import/export restrictions in fertilizer markets.

• Emerging environmental concerns and alternative fertilizers pose challenges to market stability.

Prilled Urea Market Size and Forecast

The global Prilled Urea Market was valued at USD 54.6 billion in 2024 and is projected to reach USD 82.4 billion by 2031, expanding at a CAGR of 6.1%. Demand is driven by increasing fertilizer usage to enhance crop yields and ensure food security, particularly in Asia and Africa. Industrial demand is also growing, with applications in melamine, adhesives, and plastics. However, the market remains vulnerable to feedstock price fluctuations and environmental regulations on nitrogen runoff.

Market Overview

Prilled urea holds a dominant position in the nitrogen fertilizer industry due to its high nitrogen content, cost-effectiveness, and ease of application. It is particularly suitable for broad-acre farming and has widespread use in irrigation and top-dressing. Industrial consumption is expanding in chemical synthesis and polymer production, while government subsidies support its affordability for small farmers. However, environmental challenges related to nitrogen leaching and greenhouse gas emissions are prompting research into eco-friendly alternatives and coated/controlled-release urea. As both an agricultural staple and an industrial feedstock, prilled urea will remain critical in global supply chains, though the shift toward sustainable fertilizers will redefine growth strategies.

Future Outlook

The prilled urea market is expected to remain robust, with agriculture continuing to dominate demand. Asia-Pacific and Africa will see strong growth due to expanding farmland, higher crop intensity, and population-driven food requirements. Industrial demand in resins and adhesives will diversify consumption patterns. Technological advancements such as slow-release urea, urease inhibitors, and green urea production will shape the industry’s future. Additionally, global trade flows will remain vital, with large exporters such as China, Russia, and the Middle East playing key roles in balancing supply-demand dynamics. Despite environmental challenges, the market outlook remains positive, supported by both necessity in farming and innovation in sustainable fertilizer solutions.

Prilled Urea Market Trends

• Growing Demand for High-Nitrogen Fertilizers
  Prilled urea remains a preferred fertilizer due to its high nitrogen concentration (46%), which provides a superior nutrient value compared to many alternatives. Farmers in cereal-dominant economies such as India, Bangladesh, and China heavily rely on urea to boost yields for rice, wheat, and maize. The increasing global population and higher food consumption per capita amplify this demand further. As arable land per person decreases, nitrogen fertilizers are seen as critical to achieving productivity gains. Government subsidies also encourage farmers to continue using urea as a cost-effective input. This trend ensures long-term baseline demand stability, with minimal risk of substitution in staple crop production.

• Shift Toward Coated and Enhanced Efficiency Urea
  Traditional prilled urea faces challenges of nitrogen volatilization and leaching, which reduce efficiency and contribute to environmental harm. As a response, manufacturers are investing in coated and slow-release prilled urea products that improve nitrogen-use efficiency and minimize environmental impact. Urease inhibitors and polymer coatings are being widely tested to enhance nutrient retention in soils. Adoption of such advanced formulations is particularly strong in developed markets where farmers are incentivized to adopt sustainable practices. In the long term, this trend could transform the product mix within the prilled urea industry, pushing producers to innovate continuously. Although these products are more expensive, they deliver long-term cost savings through higher crop yields and reduced fertilizer wastage.

• Industrial Diversification Beyond Agriculture
  While agriculture remains the dominant consumer, industrial applications of prilled urea are expanding steadily. It is widely used in the manufacture of resins, adhesives, and plastics, serving industries such as furniture, construction, and automotive. Urea-formaldehyde resins, for example, rely heavily on urea as a feedstock. Prilled urea also finds uses in diesel exhaust fluid (DEF) to reduce vehicle emissions, an application growing with tighter automotive emission regulations. These non-agricultural demand drivers diversify revenue streams for producers and shield the market from agricultural seasonality. The rise of industrial applications is also encouraging producers to expand beyond traditional fertilizer markets, creating a broader and more resilient demand base.

• Government Policies and Subsidies in Agriculture
  Prilled urea markets are significantly shaped by government policies, especially in Asia-Pacific, where fertilizer subsidies are extensive. Countries like India heavily subsidize urea, ensuring affordability for farmers but also distorting market prices. Export restrictions are often implemented to secure domestic supply during shortages, creating volatility in global trade flows. Subsidy-driven markets also encourage overuse, leading to soil degradation and environmental concerns. However, such policies remain politically sensitive due to the role of fertilizers in food security. Long-term reforms are being considered in several countries to balance affordability with sustainability, but in the short run, subsidies ensure strong fertilizer consumption and continued dominance of urea.

• Rising Global Fertilizer Trade and Supply Chain Dynamics
  Prilled urea is one of the most traded fertilizers globally, with large-scale exports from China, the Middle East, and Russia shaping global pricing trends. Import-dependent countries in South Asia, Latin America, and Africa rely on stable trade flows to meet agricultural requirements. However, geopolitical tensions, energy price shocks, and sanctions can disrupt trade and cause sharp price fluctuations. Logistics efficiency plays a critical role, as prilled urea is easier to store and transport compared to liquid forms. Trade liberalization, new shipping routes, and regional storage hubs are increasingly important for supply chain resilience. This trend highlights how global trade policies and energy markets deeply impact the prilled urea industry.

Market Growth Drivers

• Global Food Security and Population Growth
  With the world population projected to exceed 9 billion by 2050, demand for staple crops is expected to surge dramatically. Prilled urea plays a central role in ensuring adequate food production by providing crops with essential nitrogen for growth. Developing regions in Asia and Africa, where population growth is fastest, heavily rely on urea to sustain agricultural productivity. Rising incomes and dietary shifts toward protein-rich foods also necessitate higher grain production, further driving fertilizer usage. Governments recognize the critical role of urea in avoiding food shortages and continue to support its distribution. Thus, population growth remains a direct and long-term growth driver for the prilled urea market.

• Expanding Agricultural Practices in Developing Economies
  Emerging economies are witnessing rapid modernization of farming practices, including greater use of fertilizers to improve yields. Countries in Africa, Southeast Asia, and Latin America are increasing their per-hectare fertilizer application rates, closing the gap with developed regions. Prilled urea, due to its low cost and high efficiency, is typically the first choice for smallholder farmers transitioning into commercial agriculture. Expansion of irrigation systems and mechanization further supports higher fertilizer consumption. International aid programs and agritech innovations are also promoting fertilizer adoption. This expanding agricultural intensity in emerging markets ensures robust demand for prilled urea over the forecast period.

• Industrial Demand from Resin, Adhesive, and Chemical Sectors
  Beyond agriculture, industrial applications represent a growing driver for prilled urea consumption. It is a vital input in the production of urea-formaldehyde resins, which are used in furniture, laminates, particle boards, and adhesives. Growth in construction and housing sectors globally stimulates demand for these materials. Urea is also used in melamine and plastics production, contributing to its industrial relevance. Moreover, the increasing use of Diesel Exhaust Fluid (DEF), where urea is the core ingredient, adds to industrial demand. The convergence of agricultural and industrial needs ensures steady growth momentum for prilled urea, reducing reliance on seasonal agricultural cycles.

• Subsidy Programs and Government Interventions
  In many developing countries, particularly in Asia, governments heavily subsidize urea to keep fertilizer prices affordable for farmers. This not only ensures food security but also guarantees stable consumption levels. Subsidies often encourage farmers to prefer urea over other fertilizers, sustaining its market dominance. Additionally, governments regulate exports to maintain domestic supply, creating strong local demand stability even in times of global shortages. Such policy-driven demand reinforces prilled urea’s central role in agriculture. While long-term reforms may change subsidy structures, in the near to mid-term, these interventions continue to act as a strong demand driver.

• Technological Innovations in Urea Production and Application
  Advancements in fertilizer technology are improving both production efficiency and application effectiveness of prilled urea. Coated, slow-release, and stabilized prilled urea products are gaining traction, enhancing nitrogen uptake by plants and minimizing environmental impact. On the production side, new catalysts, process efficiency improvements, and digital monitoring are reducing energy intensity and emissions. These innovations not only align with global sustainability goals but also create opportunities for premium-priced products. Farmers adopting precision agriculture techniques also benefit from such enhanced fertilizers. Together, these innovations ensure that prilled urea remains competitive and relevant in an evolving agricultural landscape.

Challenges in the Market

• Environmental Concerns Over Nitrogen Leaching and Emissions
  Prilled urea’s widespread use in agriculture contributes significantly to nitrogen runoff into water bodies, leading to eutrophication and ecological damage. Additionally, its decomposition releases nitrous oxide, a potent greenhouse gas contributing to climate change. These environmental impacts are drawing scrutiny from regulators and environmental organizations. Several regions are considering tighter restrictions on urea usage or promoting alternative fertilizers. Farmers face pressure to adopt eco-friendly practices, which could reduce demand for traditional urea. The environmental challenge represents one of the most pressing issues for the long-term sustainability of the prilled urea market.

• Volatility in Natural Gas Prices
  Natural gas is the primary feedstock for urea production, and price fluctuations directly affect production costs. Periods of high natural gas prices make urea production less profitable, pushing up fertilizer prices for farmers. Such volatility creates uncertainty for both producers and consumers, often leading to reduced fertilizer application in price-sensitive regions. Global events such as conflicts in gas-producing areas or disruptions in LNG trade exacerbate this issue. Producers are increasingly exploring renewable hydrogen for sustainable production, but large-scale adoption remains costly. Thus, dependence on natural gas exposes the prilled urea market to significant price risks.

• Overdependence on Subsidies in Key Markets
  While subsidies drive demand, they also create structural inefficiencies in fertilizer markets. Countries such as India and Bangladesh rely heavily on subsidies to maintain affordability, but this leads to overconsumption and soil health degradation. Additionally, subsidy burdens strain government finances, creating risks of policy changes that could reduce urea consumption. Farmers accustomed to low-cost urea may resist adopting more efficient but higher-priced alternatives. Overdependence on subsidies thus creates long-term sustainability concerns for the market. The gradual phasing out or restructuring of subsidies could disrupt demand patterns significantly.

• Competition from Alternative Fertilizers
  Although urea remains dominant, alternative fertilizers such as ammonium nitrate, ammonium sulfate, and bio-based fertilizers are gaining traction. Controlled-release and organic fertilizers are being promoted in regions emphasizing sustainable agriculture. While these alternatives are generally more expensive, government incentives and environmental awareness are driving adoption in developed regions. This shift could limit the future growth of traditional prilled urea, particularly in environmentally conscious markets. Producers will need to diversify product offerings or upgrade urea formulations to remain competitive.

• Logistics, Storage, and Global Trade Disruptions
  Being a bulk commodity, prilled urea is heavily reliant on global shipping and logistics networks. Disruptions caused by geopolitical tensions, port congestions, or supply chain bottlenecks can significantly impact availability and pricing. Storage and handling challenges also arise in humid regions, where prilled urea is prone to caking and reduced quality. Import-dependent countries face higher risks during global trade disruptions, as seen during recent energy and fertilizer crises. Ensuring reliable logistics infrastructure is therefore a critical challenge for stable market operations.

Prilled Urea Market Segmentation

By Application

• Fertilizers (Agriculture)

• Industrial (Resins, Adhesives, Plastics)

• Animal Feed

• Pharmaceuticals

• Others

By Grade

• Agricultural Grade

• Industrial Grade

By Distribution Channel

• Direct Sales

• Traders/Distributors

• Online Platforms

By Region

• North America

• Europe

• Asia-Pacific

• Latin America

• Middle East & Africa

Leading Key Players

• CF Industries Holdings, Inc.

• Nutrien Ltd.

• Yara International ASA

• SABIC

• OCI N.V.

• Qatar Fertilizer Company (QAFCO)

• Indian Farmers Fertilizer Cooperative (IFFCO)

• Togliattiazot

• EuroChem Group AG

• Koch Fertilizer, LLC

Recent Developments

• CF Industries announced new capacity expansions to meet global urea demand.

• Nutrien Ltd. invested in research for enhanced-efficiency fertilizers.

• Yara International launched climate-smart fertilizer solutions incorporating coated urea.

• SABIC announced plans to increase exports of prilled urea to Asia and Africa.

• OCI N.V. partnered with renewable energy companies to develop low-carbon urea production.

This Market Report Will Answer the Following Questions

• How is the global prilled urea supply chain structured across key exporting and importing nations?

• What role do subsidies play in shaping consumption in high-growth economies?

• What is the cost breakdown of prilled urea production and distribution?

• Which regions are expected to lead demand growth by 2031?

• How are environmental policies and green fertilizer initiatives impacting the market?

• What share of demand comes from industrial applications beyond agriculture?

• What innovations are driving enhanced efficiency urea products?

• How will natural gas price volatility affect long-term pricing and supply stability?