Experts warn that sanctions against Russia could block trade with Brazil

RIO DE JANEIRO, BRAZIL – The sanctions imposed on Russia, such as the imminent partial withdrawal from the Swift international payment system and the freezing of part of its international reserves, may block trade with Brazil, particularly serious for fertilizers, Brazilian specialists warn.

“The payment system is already affected; if there is no Swift, the major banks will not issue letters of credit for business with Russia,” Mauro Lorenço Dias, director of Fiorde Logística Internacional, tells the newspaper Folha de S.Paulo.

According to the businessman, the sanctions put Russia in a similar situation to Cuba, Venezuela, and Iran outside the international banking system, which could be particularly delicate for Brazil.

The South American country is highly dependent on fertilizers for the agricultural sector, which it imports from Russia; in 2021, this crucial element for its economy accounted for 62% of Brazilian imports from the Eurasian country.

Last year, imports reached a record US$3.5 billion, a 98% increase over 2020, which was marked by the pandemic.

According to Dias, even goods already shipped may now be held longer in Brazilian ports until the importing company transfers the money to the seller in Russia. “The ship will arrive here and have difficulty releasing the cargo,” he warned.

The president of the Brazilian Foreign Trade Association (AEB), José Augusto de Castro, warned that the lack of fertilizers would affect productivity, reducing Brazilian exports.

Experts also believe that the sanctions will cause problems in foreign trade in general, impacting the prices of products imported by Brazil, further fueling inflation.

The U.S. and its North Atlantic Treaty Organization (NATO) allies are adopting new sanctions against Russia after President Vladimir Putin ordered a special military operation in Ukraine last week.

He did so in response to a request for help from the Lugansk and Donetsk republics in the Donbas region, which Russia recognizes as independent, against aggression by Ukrainian forces.

Moscow points out that the military action is also aimed at “denazification” of the region.