Global fertiliser markets have been severely interrupted by the Russia-Ukraine conflict, with urea which is a crucial nitrogen-based fertilizer being especially affected. Before the war, 16% of world urea exports came from Russia, a significant manufacturer. Because of the war and the sanctions that followed, Russia’s fertiliser exports have been reduced, which has resulted in a shortage of supply worldwide and higher costs. Nigeria has become a vital alternative supplier in the global urea market as a result of these interruptions. Nigeria is now among the top five urea exporters in the world because of a significant growth in urea exports, which reached over $1.07 billion in 2023.
More so, Nigeria’s increasing production capacity, particularly through establishments like the Dangote Fertiliser Plant, is responsible for this increase and has strengthened the country’s output. Nigerian urea’s Trade numbers clearly show the rise in demand. Urea exports reached ₦109.68 billion in the third quarter of 2023, making up 1.06% of Nigeria’s overall exports at that time. Nigeria’s expanded importance in the global fertiliser supply chain is highlighted by this growth, which acts as a buffer against the shortages brought on by the conflict between Russia and Ukraine.
Country has been able to export significant amounts of urea.
However, there have been obstacles to Nigeria’s urea Export expansion. Due to production-related gas shortages, shipments to other African nations fell by 10% in 2023, from 268,632 metric tonnes in 2022 to 242,661 metric tonnes. Nigeria’s total urea exports have remained strong in spite of these obstacles, with notable increases in shipments to nations like Brazil. Nigerian urea is in higher demand as a result of the disruptions in global urea supplies caused by the Russia-Ukraine war. Nigeria is becoming more and more important in the global fertiliser market as a result of its expanding production capacity, which has allowed it to partially offset the decline in Russian shipments.
In recent years, Nigeria has become a major player in the global fertiliser market due to its notable increase in urea production. Compared to 2.52 million metric tonnes in 2022, Nigeria produced roughly 2.58 million metric tonnes of urea in 2023, a minor rise. With export volumes reaching 3.04 million metric tonnes in 2023 and bringing in over $1.06 billion, Nigeria has been able to export significant amounts of urea due to its production capability. The impact of the urea export boom on Nigerian domestic Agriculture has been uneven.
The nation is home to three significant urea-producing facilities.
There have been worries about possible urea shortages and rising prices for local farmers, despite the fact that the increased foreign exchange gains are advantageous. According to reports, export parity pricing has affected local urea costs, restricting Nigerian farmers’ access to it and perhaps lowering agricultural production. Nigeria’s capacity to support urea production and export has been greatly aided by its infrastructure. The nation is home to three significant urea producing facilities: Dangote, Notore, and Indorama. Dangote’s factory is among the biggest in the world. But periodically, issues like gas supply constraints have hampered production, impacting both export volumes and domestic supply.
Also, the urea industry has been significantly shaped by government regulations. The goal of programs like the Presidential Fertiliser Initiative is to increase domestic mixing and lessen reliance on imports. However, to avoid local shortages and price increases, measures that guarantee a balance between export and domestic supply are required. Globally, Nigeria’s exports of urea have helped to keep fertiliser prices stable in the face of geopolitical unrest like the conflict between Russia and Ukraine. Nigeria has contributed to reducing urea shortages worldwide by addressing supply gaps, which has affected fertiliser availability and pricing globally.
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Environmental factors are particularly important because a rise in urea production may result in increased Greenhouse gas Emissions and other negative ecological effects. Nigeria must minimise the ecological impact of urea Manufacturing by implementing environmental rules and adopting sustainable production procedures. Although Nigeria’s growing urea production and export capabilities have improved its standing in the global fertiliser market and brought in a sizable amount of money, in order to guarantee sustainable growth and food security, it is crucial to address issues with domestic supply, Infrastructure limitations, policy frameworks, and environmental effects.