U.S. Sanctions Threat on Russia Trade Pushes Fertilizer Prices Higher, Raising Brazil Supply Risks

The possible imposition by the United States of sanctions on countries that maintain trade relations with Russia, due to the conflict in Ukraine, is already pressuring fertilizer prices and could directly affect Brazil.

In 2024, the country imported 41.34 million tonnes of fertilizers, according to the National Fertilizer Distribution Association (Anda), with about 25% coming from Russia. If included in the measures, Brazil could face higher costs and supply difficulties, analysts warn.

For the 2025/26 soybean crop, whose planting is about to begin, the effects are expected to be limited, as most fertilizers have already been purchased. However, the situation could worsen from 2026 onward if the war continues and sanctions intensify, says Bruno Fonseca, input analyst at Rabobank.

Analysts note that countries such as Brazil, China, and India are unlikely to cease purchasing Russian fertilizers, given the substantial volumes required and the limited supply from other markets. But concerns over supply have already led India to advance purchases, according to a report from Itaú BBA.

The bank notes that replacing Russian fertilizers with other sources tends to increase costs, as Russian products are more competitive. In 2024, for example, 53% of monoammonium phosphate (MAP), 40% of potassium chloride (KCl), and 20% of urea imported by Brazil came from Russia.

Fonseca highlights that the market has already shown an ability to adapt, as seen in 2022 when Brazil increased purchases from Canada following sanctions on Russia and Belarus. Still, a forced supplier shift could generate short-term pressure. The current distancing between the U.S. and Canada may even facilitate Canadian exports to Brazil.

Price dynamics, already sensitive to geopolitics, have been intensified by recent events. The U.S. attack on Iran in June heightened tensions in the Middle East, pushing up urea prices. “The value rose due to the strategic importance of the region and, even with expectations of a drop, remained high with India and Brazil entering the market,” recalls Fonseca.
India and the U.S. are also facing high costs in the nitrogen, phosphorus, and potassium (NPK) complex. According to StoneX analyst Tomás Pernías, the scenario stems from the imbalance between global supply and demand. China, a key supplier, limits its exports to prioritize domestic supply, while strong demand in India sustains prices.

In July, urea rose 5.2% at Brazilian ports, according to Itaú BBA. The increase also reflects the start of purchases for the 2025/26 second corn crop. Potash is also appreciating, Rabobank reports, estimating fertilizer prices up 10% from the previous crop.

The rising prices and limited supply are also changing purchase patterns and volumes. According to StoneX, imports rose by almost 20% between January and July compared to the same period in 2024.

This was due to the replacement of fertilizers such as MAP and diammonium phosphate (DAP) with less concentrated options like single superphosphate (SSP), which requires larger volumes. Thus, Brazil imported 2.1 million tonnes of MAP, 7.6% less than in 2024, while SSP imports rose nearly 19%.

Imports of nitrogen-based fertilizers grew almost 12% compared with the same period in 2024.

Source: Globo Rural

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