Brazil is looking for alternatives to guarantee the supply of fertilizers. The Minister of Agriculture, Tereza Cristina, has been meeting with companies producing this input from Iran and Canada to expand the import of the product before leaving the portfolio to run for the Senate.
Brazilian agribusiness has been suffering from the rise in inputs since the beginning of the pandemic. Spending on fertilizers was BRL 620 per hectare in September 2020 in a soybean crop in the Londrina region. A year later, the value increased to R$ 1,323, more than double. In the period, the participation of fertilizers in the operating cost jumped from 20% to 31%.
This happened because important global producers suspended exports for various reasons. China and Russia stopped shipments to maintain balance in the domestic market. Belarus, which supplies one-fifth of the world’s potash exports, was banned from trade due to European Union and US sanctions on the country.
Days before the start of the war in Ukraine , Brazilian President Jair Bolsonaro even met with Russian President Vladimir Putin. The Brazilian president asked the Kremlin to guarantee the supply of fertilizers.
Russia is the main supplier of Brazilian agribusiness and accounts for a quarter of all imported inputs. According to data from Itaú BBA, the Russians are responsible for 20% of nitrogenous products purchased on the global market, in addition to 28% of potassium and 15% of phosphates.
Despite the difficulties of the armed conflict and the mutual sanctions imposed by the United States, Canada and European countries on the Russians, the Ministry of Agriculture, Livestock and Supply (Mapa) confirmed that the trade flow continues. The Brazilian government is not on the list of sanctions by Moscow.
agreement with the east
In February, Tereza Cristina met with the president of the National Petrochemical Company (NPC), an Iranian state-owned company, and visited the Shiraz Petrochemical Company, one of the largest urea producers in the country.
NPC said it can increase urea exports from the current 600,000 tonnes to up to 2 million tonnes per year. The state-owned company is part of the Iranian Ministry of Petroleum, a portfolio that aims to promote the development of Iran’s petrochemical sector.
The minister also met representatives of the Arab Brazilian Chamber of Commerce, a bloc responsible for 26% of fertilizers imported by Brazil and made up of Morocco, Qatar, Saudi Arabia, Egypt, Oman and Algeria.
The Middle East is the largest global producer and exporter of petrochemicals, followed by Iran. The Iranian industry produces approximately 5 million tons of urea per year. About half is consumed by the domestic market, and the other part is exported.
The minister visited Canada in March to speak with representatives of fertilizer companies. The country is the largest global producer of potash, accounting for a third of the production of the input.
Tereza Cristina was with the presidents of Brasil Potash, Gensource, Nutrien, and Fertilizer Canada. Canpotex, which exports potash from Canada’s two main mining companies, committed to expanding shipments beyond the 4 million tons of the input already shipped to Brazilian ports.
Source: Ministry of Agriculture, Livestock and Supply (Mapa).