Global Urea Fertiliser Prices Skyrocket, Unexpected Conditions in Indonesia
Jakarta, CNBC Indonesia - Global urea fertiliser prices have surged sharply amid escalating conflicts in the Middle East region. This increase has even reached double the previous levels, triggered by disruptions to the world’s fertiliser distribution routes, which have long relied heavily on the Strait of Hormuz.
The President Director of PT Pupuk Indonesia (Persero), Rahmad Pribadi, revealed that the conflict in the Strait of Hormuz has a significant impact on global fertiliser trade.
“We want to update on the situation that has been quite heated in recent days, namely the conflict in the Strait of Hormuz, which not only closes the energy route but also the fertiliser route. 30 percent of the world’s fertiliser trade passes through the Strait of Hormuz,” Rahmad said during a Hearing Meeting with Commission XI of the Indonesian House of Representatives at the Parliamentary Complex, Jakarta, on Thursday (2/4/2026).
He explained that the volume of fertiliser passing through that route is very large, reaching millions of tonnes every month.
“30% in volume is approximately 4 million tonnes exiting the Strait of Hormuz each month. That 4 million tonnes consists of 1.5 million tonnes of urea, 1.5 million tonnes of sulphur, and the remaining 1 million tonnes of various types of fertiliser, including methanol,” he clarified.
Due to these disruptions, global urea prices have skyrocketed from around US$400 to US$800 per tonne.
“Thus, there has been a price volatility in urea, increasing from US$400 before the war to now reaching US$800 or double,” he stated.
However, amid the global price surge, the domestic situation is relatively secure. Rahmad assured that Indonesia’s urea supply is not significantly affected, as it is produced domestically.
“But we can assure the leaders and members of Commission XI of the House of Representatives, God willing, Indonesia is safe because the urea is produced domestically. In fact, today Indonesia can become a stabiliser or even a saviour of the world’s food ecosystem,” Rahmad emphasised.
According to him, Indonesia is in a stronger position compared to many other countries that rely on imports.
“Intuitively, Indonesia’s situation is usually vulnerable if there is global volatility. Specifically regarding fertiliser, we reiterate, specifically regarding fertiliser, there is no disruption, especially in the sufficiency of urea fertiliser which is affected by the Strait of Hormuz,” he added.
This is supported by the substantial national urea production capacity. Pupuk Indonesia records an operational capacity of 8.8 million tonnes per year.
“Our urea fertiliser capacity is 8.8 million tonnes. The installed capacity is indeed 9.4 million tonnes, but the operational capacity is 8.8 million tonnes because some are too old to operate,” he explained.
Meanwhile, for other types of fertiliser such as phosphate and potash, Rahmad said the global supply is still relatively safe, although there is potential for increased logistics costs.
“The others might be affected by freight factors, but we just returned from a fertiliser conference, and many phosphate and potash suppliers were present, all assuring no production disruptions in their regions,” he said.
Domestically, Rahmad also ensured that subsidised fertiliser prices remain controlled. In fact, the highest retail price (HET) has been lowered and will not be raised again.
“Thus, God willing, fertiliser will be safe, the HET has dropped 20 percent, there are no plans to increase it again, meaning the HET will remain. And the urea fertiliser needs, both subsidised and non-subsidised in Indonesia, we can assure will be fulfilled well,” Rahmad concluded.