April 20, 2026 - Each year, farmers worldwide apply close to 200 million tonnes of the three primary nutrients, nitrogen, phosphorus and potassium, the three essential building blocks for plant growth, to their crops. 

Nitrogen makes up the largest share of inorganic fertilizer use worldwide and accounted for 58% of production in 2023.

Urea is a straight inorganic nitrogen fertilizer, meaning that it only supplies nitrogen, not potassium or phosphorus. 

Nitrogen is essential for plant growth and required in large quantities because plants cannot obtain it directly from air and water like oxygen or carbon, so it must be added through fertilizers.

China’s self-sufficiency in urea production is thanks to coal

China is largely selfsufficient in urea production, with about 78% of its output coming from coal rather than natural gas, a key distinction from other major exporters such as Qatar, Russia and Saudi Arabia, which rely predominantly on gas. While the technical processes for converting coal or gas into urea are largely the same, there are some key differences at the beginning.

From energy to fertilizer

This coalbased production model gives China access to abundant, domestically sourced energy, reducing exposure to volatile international gas prices and supply disruptions. During the Iran war in early 2026, which disrupted shipping through the Strait of Hormuz—a route handling roughly 30% of global fertilizer trade—urea prices outside China surged by about 70%. In contrast, China maintained ample stocks, keeping domestic prices roughly a third of international benchmarks, according to analysts cited by Reuters.

Prioritizing investment in using its abundant coal reserves has worked for China

China’s coalbased urea production reflects its abundant domestic resources of the mineral, historic investment in coaltochemicals infrastructure, and a policy focus on fertilizer selfsufficiency and food security—advantages enjoyed by few other ureaproducing countries.

China’s fertilizer industry developed alongside its coalbased heavy industrial system, rather than around gas. The United Nations’ Food and Agriculture Organization says nitrogen fertilizers dominate global fertilizer use and production, and China is both the largest producer and user of nitrogen fertilizers.

China is a large exporter of major fertilizers but has stopped due to the war

Last year, China accounted for roughly a fifth of fertilizer imports by Brazil, Indonesia and Thailand as well as a third of those by Malaysia and New Zealand, data from the International Trade Centre shows. ‌For India, the share was about 16%, its trade data shows.

Between half and 80% of those exports are now restricted, according to a Reuters analysis of Chinese customs data.

“Buyers were hoping China would step in and fill the supply gap, but this decision will only tighten supplies further,” a New Delhi-based fertilizer company official said about the recent restrictions.

China is clamping down on fertilizer exports to protect its domestic market, industry sources said, putting an additional strain on global markets already grappling with shortages caused by the U.S.-Israeli war on Iran.

China is among the largest exporters of fertilizer - shipping more than $13 billion worth last year - and it has a history of controlling exports to keep prices low for farmers.