Australia's federal government is turning to southeast Asia to secure fertilizer supply for the upcoming winter crop, given unprecedented supply and cost pressures caused by the US-Iran war.
Australia's prime minister Anthony Albanese is travelling to Brunei and Malaysia on 14-17 April hoping to secure fertilizer supply. Australia imported 11pc and 10pc of its urea from Brunei and Malaysia, respectively, in 2025, trade data from the Australian Bureau of Statistics (ABS) show (see graph).
"We're continuing to engage closely with countries in our region to support the flow of essential goods like petrol, diesel and fertilizer," Australia's foreign minister Penny Wong said on 13 April.
The government is working to maintain a flow of essential goods between Australia and Brunei, including urea, Albanese said on 15 April in a shared statement with Brunei's Sultan Hassanal Bolkiah. Brunei is not looking to introduce any export restrictions on fertilizer supply to Australia, Albanese said on the same day.
Seeding for the winter crop typically starts around 25 April. Growers are considering shifting from standard crops such as wheat and canola to legumes or pulses, which require less fertilizer. Urea applications will need to be reduced for pre-seeding and top-dressing if the conflict continues, multiple suppliers said.
Australia's urea imports usually peak in March-June, but the strait of Hormuz is effectively shut, limiting import origins. Australia imports around 60pc of its urea via the strait. Southeast Asia accounted for 32pc of Australia's urea imports in 2025, ABS data show.
India issued a tender for 2.5mn t of urea on 4 April, with prices emerging at a substantial premium to other markets on 15 April and set to further tighten global availability. Southeast Asian producers contributed 346,000t of urea to India's last two tenders closing on 20 November and 2 January, which totalled 2.5mn t.
Southeast Asia typically exports around 5mn t/yr of urea, spread across Malaysia, Indonesia, Brunei and Vietnam. Key suppliers from the region include Malaysia's Petronas, and Brunei Fertilizer Industries.
Total production was 13.5mn t in 2025, while regional demand was about 8.15mn t, Argus analytics show.
Indonesia remains a major urea producer within the region, with capacity of 9.4mn t/yr, primarily driven by state-owned Pupuk Indonesia. But a substantial portion of this output is positioned for the domestic market. Meanwhile, Vietnam is mostly a strategic exporter of urea, with around 2.5mn t/yr of urea production and 1.8mn t/yr of domestic urea requirement. But its export patterns tend to be price elastic. Spikes in international prices typically encourage Vietnamese producers to re-enter the export market. Shipments from Indonesia and Vietnam into Australia are usually characterised by spot purchases, rather than consistent cargo flows or contractual deliveries.
Australia's federal government is creating a Fertilizer Supply Working Group to strengthen fertilizer availability. But multiple suppliers have yet to hear details of this support, Argus was told.
Argus last assessed granular urea at $780-850/t fob southeast Asia on 9 April, up from $484-498/t fob southeast Asia on 26 February before the war began (see graph).
