Nepal’s supply of urea fertilizer has been severely impacted after China tightened its export restrictions in June 2024. This has raised concerns about maintaining an adequate supply for the country’s agricultural needs, government officials have said.
China’s decision, aimed at ensuring domestic food security, has contributed to a sharp rise in global urea prices and disrupted supply chains. “China now only sells urea in bags of up to 10 kg and does not allow large-scale exports. It has also stopped selling to companies that purchase fertilizer in China for re-export. As a result, Nepal’s supply has been affected,” said Bishnu Prasad Pokharel, General Manager of Agriculture Inputs Company Limited. He added that due to these restrictions, Nepal had to cancel three separate bids for 30,000 metric tons of urea this year.
With rising prices, suppliers have been reluctant to commit to deliveries, fearing losses due to market volatility between the bidding and supply prices. For instance, the average price of urea in Eastern Europe was $314 per metric ton between April and June 2024, which surged to $360 per metric ton by the October-December period of 2025. According to World Bank data, the price further climbed to $436 per metric ton in February 2025.
Ramkrishna Shrestha, Joint Secretary at the Ministry of Agriculture and Livestock Development, noted that fluctuating prices have deterred suppliers from participating in tenders. “The price gap between the bidding phase and actual purchase has created significant challenges in securing supply,” he said.
Russia-Ukraine War Further Strains Supply
Russia and Ukraine, two of the world’s major fertilizer producers, have also seen disruptions since their conflict began in 2022. When direct shipments from these countries were affected, Nepali contractors relied on imports from China via India. However, with China imposing stricter controls since June 2024, Nepal’s access to urea has been further limited.
Russia, a key producer of nitrogen-based fertilizers like urea, benefits from abundant natural gas reserves—an essential raw material for fertilizer production. However, Western sanctions on Russia have caused repeated supply disruptions, further driving up global prices. Meanwhile, Ukraine, though a smaller producer compared to Russia, has also faced setbacks in fertilizer production and exports due to the ongoing war.
In 2022, when global fertilizer prices peaked, Nepal struggled to secure supplies. According to World Bank data, the price of urea averaged $700 per ton that year. The soaring costs forced the government to allocate significantly higher budgets for fertilizer imports, yet shortages persisted.
Nepal Turns to Alternative Markets
To address supply challenges, Nepal has begun importing fertilizers from alternative sources, including Bahrain, Brunei, Qatar, Oman, Saudi Arabia, and Turkmenistan. These new trade channels are expected to mitigate the impact of China’s export restrictions and global price fluctuations.
As of now, the state-owned Agriculture Inputs Company Limited holds 23,000 metric tons of urea, 46,000 metric tons of DAP, and 10,000 metric tons of potash in stock. Additionally, 60,000 metric tons of urea and 25,000 metric tons of DAP are in the process of being imported.
Nepal requires over 600,000 metric tons of chemical fertilizers annually to sustain rice cultivation across 1.4 million hectares of farmland. General Manager Pokharel assured that the government is working to issue additional tenders and import more fertilizer as needed to prevent shortages during the critical agricultural season.
