Egyptian granular urea at USD 535 as gas supplies to fertilizer plants cut 20%

Egyptian granular urea is fetching about USD 535 a ton FOB in November contracts, up roughly 17% from about USD 457 in September, Khaled Abu Al Makarem, head of the Chemicals and Fertilizers Export Council, tells EnterpriseAM. That makes Egypt the priciest origin of comparable regions, ahead of China, the rest of the Middle East, Nigeria, and Algeria.

This price rally comes just as the government starts rationing the gas the plants run on: Kima told the EGX (pdf) that its supplies were cut by 20% from noon on Sunday 1 November, and that it has implemented the cut, with its urea plant still running normally. Meanwhile, Mopco told the EGX (pdf) that operations continue uninterrupted and that it’s adjusting production rates to the gas actually available, without saying whether the 20% cut applies to its plants.

DATA POINT- Egypt can make about 6.5 mn tons of urea a year and uses roughly 2.9 mn tons at home, per the petroleum minister, which leaves some 3.6 mn tons a year for export, by our math. The wider sector is exporting more too: chemical and fertilizer exports reached USD 9.54 bn in the first nine months of 2026, up 34%, with fertilizers contributing USD 2.53 bn of that.

Prices are up, but volumes are set to fall: Nitrogen plants use gas as both feedstock and fuel, so a 20% allocation cut hits volumes and utilization rates directly. And the gas those plants still get costs more: it’s now priced off global levels through the dynamic pricing mechanism, with the effective cost of gas for some producers crossing USD 9 / mmBtu by late April, as we reported at the time. Higher urea prices cover part of that squeeze. Producers are still meeting local demand and export commitments, Abu Al Makarem tells us, adding that the size of the hit depends on how long the cut lasts and on each plant’s operating rates.

Egypt is the priciest origin on the market right now: Egyptian granular urea trades above Chinese material (about USD 430 a ton), other Middle East origins (about USD 450), Nigeria (about USD 475), and Algeria (about USD 520), according to CommodityScope data. And India isn’t the buyer pushing prices up. Its 1.7 mn ton tender did bring out offers, but at as low as USD 352 a ton CFR in October, well below Egyptian levels, and India took only about 410k tons of what it sought. India’s tie to Egypt is volume, not price: Egypt shipped 609k tons to the subcontinent from April to June, three times its total shipments for the entire previous Indian fiscal year. That leaves European and American demand as the driver rather than the Indian tender, by our read.

Still, the sell-side expects the gas cut to bite: CI Capital told clients this week in a research note seen by EnterpriseAM that the lower allocations will hit Abu Qir, Mopco, and Valmore Holding (through its subsidiary Alexfert) in 4Q 2026 and potentially through 2027, weighing on production volumes and capacity utilization.

BUT- Prices are high enough to cover the volumes lost to a 20% allocation cut, so producers’ profits need not fall, an industry source tells EnterpriseAM, with companies now working through what a longer gas shortfall would do to their numbers.

IN CONTEXT- The gas cut comes in a year that had already handed nitrogen producers three headwinds: the gas floor rising to USD 8.5 / mmBtu in April; a nitrogen fertilizer export duty introduced at USD 90 a ton in May, switched to 10% of export value in late June and repealed on 1 August; and a 39% slide in urea export prices from the April peak, to about USD 550 a ton.

What’s next: The government is expected to restore the allocations, both to keep urea exports and the USD inflows they bring running, and to avoid pushing fertiliser costs into farm-gate prices and food inflation, a government official tells EnterpriseAM.