Demand for Nigeria’s urea surges as Iran war jolts global commodity markets

Nigerian fertiliser producers are seeing a surge in demand for urea as the Iran war disrupts global commodity markets, leaving countries scrambling for supplies ahead of the planting season.

The war, which has closed the strait of Hormuz, has shutdown fertiliser plants in the Gulf region and severely disrupted shipping routes is potentially curbing supply of urea – the most widely used fertiliser globally.

The strait of Hormuz is a key shipping route. Not only does the global seaborne oil pass through it, so does a third of global trade in urea.

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“We have seen consistent increase in orders since the Iran war,” said an employee at Indorama who is not authorised to speak on the issue. “But we are prioritising our customers before we take those orders,” he added.

The surge is expected to boost the country’s earning from urea exports as the country is rich in the production of the commodity.

Nigeria has three urea production plants, namely Notore, Indorama, and Dangote, with a collective capacity of 6.5 million metric tons. These facilities are currently operational and collectively produced approximately 3.65 million Metric Tons (MT) of urea in 2023.

Gas, the key feedstock for the production of ammonia and nitrogen-based fertilizers, has jumped more than 50 percent in Europe since the start of the Iran war. This is forcing European and Middle Eastern producers to cut output to minimum levels.

According to Bloomberg, Slovakia’s leading fertilizer manufacturer has announced a reduction in ammonia production due to a significant increase in natural gas prices.

There is increased demand for ammonia and urea and Nigeria produces these nitrogen-based fertilisers, said Gideon Negedu, former executive secretary of the Fertiliser Producers Suppliers Association of Nigeria.

“For our local urea industry, the current surge in demand is a boon. Production must increase to meet the rising demand,” Negedu said.

Bloomberg quoted Devakumar Edwin, vice president of Dangote Industries Limited, as saying demand for urea from the Dangote Fertiliser company has increased significantly because of shortages in the international market.

Read also: Demand for Dangote fertiliser rises amid US-Iran war

“Demand has gone up substantially due to the shortage in the global market,” Edwin told Bloomberg in an interview.

Also, the surge is expected to boost the country’s export earnings. The country earned $850 million from urea exports in 2024, according to UN Comtrade data. The data also showed that the country exported 3.2 million tons in 2024.

Locally, the prices of a 50kg bag of fertiliser has surged by 11 percent from N33,000 sold a week ago to N36,500, stroking food inflation fears in Africa’s most populous nation.