Middle East conflict highlights Brazil’s dependence on imported fertilizers

The conflict in the Middle East has renewed concerns about Brazil’s heavy reliance on imported fertilizers, exposing vulnerabilities in the country’s agricultural supply chain.

Brazil imports about 85% of the nutrients used in its agriculture sector, according to the Brazilian Agricultural Research Corporation (Embrapa), leaving the country’s agribusiness exposed to geopolitical disruptions and volatility in international markets.

Since the start of the year, the price of the April urea futures contract on a cost-and-freight (CFR) basis to Brazil has risen 36%, reaching $573 per tonne last week.

Urea prices had already been climbing due to other factors, including export restrictions by China — the world’s largest producer — the war in Ukraine and strong demand from India. Over the past 12 months, prices have surged 73%.

Brazil’s dependence is particularly pronounced in potash. The country produces less than 1% of global supply while accounting for about 22% of global demand as the world’s largest importer. Roughly 98% of the potash used in Brazil is imported.

The situation is further complicated by the geographic concentration of production. About 48% of global potash supply is located in countries affected by geopolitical tensions, including Russia, Israel and Belarus, according to consultancy CRU Group.

Dependence is also high in the phosphate segment. Around 78% of Brazil’s phosphate fertilizer consumption is supplied through imports, according to the National Association for Fertilizer Diffusion (Anda).

The provided chart offers a comparative analysis of Brazil’s monthly fertilizer inbound flow since January 2023. These insights are powered by Datamar’s DataLiner market intelligence:”

Fertilizer Imports | Jan 2023 – Jan 2026 | WTMT

Source: DataLiner (click here to request a demo)

After the outbreak of the war in Ukraine in 2022, Brazil renewed its focus on fertilizer security and launched a National Fertilizer Plan aimed at expanding domestic production.

In January, Petrobras resumed nitrogen fertilizer production in northeastern Brazil. The plant has a capacity of about 3,100 tonnes of urea per day, equivalent to roughly 12% of Brazil’s domestic market.

Meanwhile, the Autazes project — led by Potássio do Brasil — plans to develop potash production in the state of Amazonas.

“We are seeing some progress. Petrobras is returning to the nitrogen fertilizer sector, which could be a viable option,” said Maísa Romanello, a fertilizer analyst at Safras & Mercado.

“We won’t be able to meet all domestic demand, but in moments like this, when international prices become very high, it can encourage the growth of local industry and help supply some domestic volumes, easing our dependence,” she added.

However, challenges related to raw material availability, labor and infrastructure continue to affect the competitiveness of Brazil’s fertilizer industry.

Gisele Augusto, fertilizer pricing specialist at consultancy Argus, said there is significant movement within the Brazilian market to reduce dependence on foreign supply but warned that the current geopolitical situation makes this difficult.

“For example, in the case of potash, production depends on mining. Regardless of the conflict, we cannot simply create a mine in Brazil overnight,” she said.

“In phosphates, you still depend on raw materials and reserves, access to inputs and new production plants. And for nitrogen fertilizers, the key factor is natural gas availability. The big question for everyone is how natural gas will be priced.”

Tomás Pernías, a market intelligence analyst at StoneX, said that even if Petrobras reaches the production capacity it has projected, Brazil would still rely heavily on international markets.

“Even so, it would represent progress toward supplying part of Brazil’s demand with domestic production,” he said.

Source: Globo Rural

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