The global fertilizer market generally saw a solid start in the first week of the new year, with prices for major varieties remaining firm. Meanwhile, new agricultural support policies introduced by several Southeast Asian governments became a key variable influencing regional market supply and demand.
Market Dynamics
In the international market, urea prices were the most noteworthy. The global urea market remained firm overall, with large-scale tenders in India being the core driving force. This trend will continue to affect price trends and supply flows in major export markets.
The Chinese market showed a mixed picture of differentiation and stability. The urea market had a strong start, with mainstream domestic transaction prices rebounding significantly from previous lows, driven by multiple factors including increased demand and reduced supply. Meanwhile, the phosphate fertilizer market focused on stability. Nine major domestic phosphate fertilizer producers recently jointly issued a commitment to resolutely fulfill their responsibilities of ensuring supply and price stability, guaranteeing stable prices and sufficient supply from now until the end of spring planting in 2026.
Southeast Asian Market Policies
As an important fertilizer consumption market, the policy moves of various countries at the beginning of the new year in Southeast Asia directly affect the regional trade environment and costs.
Indonesia's Subsidized Fertilizer Program: PT Pupuk Indonesia has officially launched the distribution of subsidized fertilizers for 2026. The total annual quota is a staggering 9.8 million tons, with a government budget of 46.87 trillion Indonesian Rupiah, covering multiple varieties including urea and NPK compound fertilizer. This large-scale subsidy program will effectively guarantee fertilizer supply for domestic farmers and may reduce reliance on the immediate import market.
Malaysia's Tax Relief: The Malaysian government has announced a zero-sales tax exemption policy for key raw materials required by registered feed, fertilizer, and pesticide manufacturers. This move aims to reduce local agricultural production costs and, in the long term, may stimulate domestic fertilizer demand and provide cost advantages for relevant manufacturers.
Myanmar's Organized Imports: The Myanmar Fertilizer, Seed and Pesticide Entrepreneurs Association (MFSPEA) is organizing the import of urea and compound fertilizers for the first quarter of 2026 and supplying the market based on a competitive pricing system. This provides a clear trading window for relevant exporters.
Market Outlook
Overall, the fertilizer market in early 2026 is expected to operate under the combined influence of cost support, regional demand, and government macro-control. In the short term, the results of the Indian tender will determine the next direction of international urea prices. For the Southeast Asian market, the amount of subsidized fertilizer released in Indonesia and the effect of Malaysia's new policy on reducing actual production costs are key local factors that need to be monitored. It is anticipated that in the coming weeks, the market will seek a new balance amidst the interplay of international market conditions and regional policies.
