Two Crises, One Chokepoint
The world’s most productive farmland cannot feed itself without imports from some of the world’s most unstable regions. That paradox is now acute. Brazil’s Agriculture Ministry has classified the fertilizer supply outlook as an “extremely high risk” to the 2026/27 harvest in two urgent internal assessments obtained by the Gazeta do Povo, warning that the Iran war and Chinese export curbs are converging to threaten food security in the country that feeds a significant share of the planet.
The immediate trigger is the Strait of Hormuz. Roughly one-third of all globally traded urea — the most widely used nitrogen fertilizer — transits the 21-mile waterway between Iran and Oman, along with massive volumes of ammonia, sulphur, and phosphate precursors from Qatar, Saudi Arabia, and the UAE. With commercial shipping suspended and insurance premiums soaring, that supply has been effectively cut off. Global urea prices surged 26% in a single week after the strait closed, with granular urea climbing to between $500 and $550 per tonne — up from around $480 in late February. Persian Gulf nations supplied roughly 36% of Brazil’s urea imports in 2025.
China Closes the Back Door
In past crises, China served as the emergency supplier. When the Ukraine war disrupted Russian fertilizer flows in 2022, Chinese phosphate exports to Brazil doubled, preventing what industry executives described as a serious shortage. This time, Beijing is moving in the opposite direction. China’s fertilizer producers association has requested export restrictions on MAP — the primary phosphate product used in soybean and corn planting — through at least August 2026, prioritizing domestic supply. MAP prices at Brazilian ports have surged to roughly $720 per tonne, up 13% since January. The ministry’s technical assessment estimates a potential deficit of 1 to 3 million tonnes of phosphate fertilizers, sufficient to compromise productivity on up to 20% of national demand.
A Vulnerability That Never Got Fixed
Brazil imports approximately 85% of the fertilizers its agriculture consumes — more than 43 million tonnes annually — while producing only around 7 million tonnes domestically. The country is the world’s fourth-largest fertilizer consumer and its largest importer. A National Fertilizer Plan launched in 2022 under Bolsonaro aimed to reduce import dependency to 45% by 2050, but progress has stalled. Petrobras shuttered its ammonia and urea plants in Bahia, Sergipe, and Paraná between 2018 and 2022, and a planned mega-factory in Três Lagoas, Mato Grosso do Sul, never materialized. The geological and economic logic is stubborn: Brazil’s natural gas remains expensive by global standards, and the cheapest fertilizer production sits atop the Persian Gulf’s virtually free gas.
The timing compounds the pain. Brazilian farmers begin purchasing fertilizer for the 2026/27 soybean and corn planting season — which starts in September — during the coming months. Rabobank analyst Bruno Fonseca warned that the impact of the Hormuz closure may take time to materialize, since many shipments are scheduled to arrive between May and June. But if the strait remains closed through that window, the squeeze will be severe. Fertilizer already accounts for 30% to 40% of a Brazilian farmer’s operating costs. At current exchange rates, a soybean grower now needs nearly 29 sacks of grain just to buy one tonne of MAP — a ratio that has deteriorated sharply since the start of the year and erodes the margins that make Brazilian agriculture globally competitive.