Urea supply: Australia sets up working group amid Iran war risk

The Australian government has established a new working group combining government agencies and fertilizer industry bodies to address risks to urea supply caused by the war in Iran, Agriculture Minister Julie Collins said in a 31 March 2026 media release. The initiative aims to coordinate immediate measures to protect domestic agricultural inputs.

The working group brings together the Department of Agriculture, the Department of Industry, Foreign Affairs and Trade, representatives from the Prime Minister’s office and industry groups including Fertilizer Australia and the National Farmers’ Federation. Collins told a radio interview the group will meet weekly to assess stocks, distinguish between contract-covered and spot-exposed volumes, and pursue alternative suppliers, noting around 60% of Australia’s urea had previously originated from Middle Eastern suppliers.

Market reports indicate the conflict has disrupted key Gulf export routes and tightened spot availability, with some importers warning domestic stocks may be drawn down by mid-April unless replacement shipments arrive. The disruption has already pushed short-term price volatility higher and raised concerns over input costs for farmers ahead of critical sowing seasons. News outlets and commodity analysts expect continued price sensitivity if shipments remain constrained.

Broader analyses underline the concentration risk in the global urea market: dependence on a limited number of producing regions amplifies the effect of any regional shock. Financial institutions and sector studies warn that sustained supply constraints would not only lift fertilizer prices but could transmit upward pressure to agricultural production costs and food prices, complicating inflation dynamics. Australian policy responses emphasize diversification of import sources, temporary regulatory relief for exporters and accelerating domestic production projects to improve sovereign capability.

Market participants expect the working group to focus first on transparency—clarifying available volumes and contractual exposures—then on pragmatic steps such as underwriting critical imports, leveraging Export Finance Australia support and negotiating spot purchases from alternative suppliers. Over the medium term, investment in domestic capacity like the Perdaman urea project and longer-term supply agreements will be watched closely by traders and farmers as key risk-mitigation measures. The group’s forthcoming reports and weekly updates will be pivotal for near-term market sentiment.