RIO DE JANEIRO, BRAZIL – Brazil seeks alternatives to guarantee the supply of fertilizers. The Minister of Agriculture, Tereza Cristina, has been meeting with companies producing this input in Iran and Canada to expand the importation of the product before leaving the portfolio to run for the Senate.
Brazilian agribusiness has been suffering from increased inputs since the beginning of the pandemic. The cost of fertilizers was R$620 (US$133) per hectare in September 2020 on a soybean plantation in the Londrina region (Paraná State). A year later, the value increased to R$1,323, more than double. In the period, the share of fertilizers in the operational cost jumped from 20% to 31%.
It happened because important global producers suspended exports for various reasons. China and Russia stopped shipments to maintain the balance in the domestic market. Belarus, which supplies one-fifth of the world’s potash exports, had its trade banned because of the European Union and the United States sanctions against the country.
FERTILIZER SHIPMENTS FROM RUSSIA
Days before the beginning of the war in Ukraine, the president of Brazil, Jair Bolsonaro, met with the Russian president, Vladimir Putin. The Brazilian president asked the Kremlin to guarantee the supply of fertilizers.
Russia is the leading 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 the nitrogenous products bought on the global market, 28% of the potassium, and 15% of the 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 countries sanctioned by Moscow.
AGREEMENT WITH THE EAST
In February, Minister Tereza Cristina met with the National Petrochemical Company (NPC) president, an Iranian state company. She visited the Shiraz Petrochemical Company, one of the largest producers of urea in the country.
The NPC said it could expand urea exports from 600,000 tons to up to 2 million tons a year. The state-owned company is part of the Iranian Oil Ministry, which aims to promote the development of Iran’s petrochemical sector.
The minister also met the Arab-Brazilian Chamber of Commerce representatives, a block responsible for 26% of the fertilizers imported by Brazil and formed by Morocco, Qatar, Saudi Arabia, Egypt, Oman, and Algeria.
The Middle East is the largest global producer and exporter of petrochemical products, followed by Iran. The Iranian industry produces approximately 5 million tons of urea per year. About half of this is consumed by the domestic market, and the other half is exported.
INCREASED IMPORTS FROM CANADA
The minister visited Canada in March to talk to representatives of fertilizer companies. The country is the largest global producer of potassium, being responsible for one-third of the input production.
Tereza Cristina met with the presidents of Brasil Potash, Gensource, Nutrien, and Fertilizer Canada. Canpotex, which exports potash from Canada’s two main mining companies, committed itself to expand shipments beyond the 4 million tons of the input already sent to Brazilian ports.
With information from Canal Agro