WTO highlights vulnerability of Brazil and other fertilizer importers

The World Trade Organization (WTO) has published a report detailing how the Persian Gulf conflict severely disrupted global fertilizer trade, underscoring the vulnerability of major agricultural producers at a time when the situation is still far from normal.

The report lands just as hostilities flare anew between the U.S. and Iran over control of the Strait of Hormuz, a critical shipping lane for a large share of global oil and fertilizer trade. Washington has resumed airstrikes on Iran while insisting the Strait remains open; Tehran, for its part, has threatened to keep attacking vessels that use the route without its authorization.

Since fertilizers are among the essential inputs for farming, disruptions stemming from the crisis continue to raise concerns that crop yields could suffer, with knock-on effects for food prices and global food security, the WTO said.

The WTO’s data lay bare just how exposed Brazil is on this front. Despite being one of the world’s largest food producers and exporters, the country remains heavily reliant on imported fertilizer.
The analysis appears to have been drafted around the time the U.S. and Iran announced a ceasefire attempt and pledged to restore normal navigation through the Strait of Hormuz.

Urea prices had nearly returned to pre-conflict levels after doubling at the outset of the fighting. Having climbed from around $400 a tonne to more than $850 in April, prices eased back to $453 by June. Diammonium phosphate (DAP) prices rose from $580 to $770 a tonne. Even so, both increases fell short of the peaks hit in 2022 after Russia’s invasion of Ukraine, when urea briefly topped $900 a tonne and potash exceeded $1,200.

The truce, however, now looks shakier than many expected. Per the WTO, where fertilizer prices go from here will hinge largely on whether the deal between Washington and Tehran actually succeeds in restoring commercial shipping through the Strait.

Accordingly, the organization says reopening the strait would, “in due course,” help ease trade tensions and restore stability to global markets.

The WTO notes that fertilizer imports in several economies are especially exposed to disruptions in the Persian Gulf. India sourced nearly two-thirds of its nitrogen fertilizer imports from the region, while Thailand drew roughly half of its supply from there. Australia, Brazil, Morocco and the United States are among the other major destinations affected.

That said, the organization notes, vulnerability also hinges on how much of domestic consumption imports actually cover.

Brazil’s case is a stark one: according to estimates from the Brazilian Confederation of Agriculture and Livestock (CNA), 93% of the fertilizer used in the country in 2025 was imported—not just from the Persian Gulf, but from foreign suppliers overall.

That leaves Brazilian farmers particularly exposed to geopolitical shocks. Fertilizer prices have stayed elevated since the 2022 shock triggered by Russia’s invasion of Ukraine, and the current uncertainty is already complicating planning for the 2026/27 crop.

The chart below shows a comparison of fertilizer imports by Brazil in the first five months of the year since 2017. Data are from DataLiner:

Brazilian Fertilizer Imports| Jan to May 2017-2021 | WTMT

Source: DataLiner (click here to request a demo)

Share of global fertilizer imports (2024)

Nitrogen fertilizers

1. Brazil 12.7% US$4.9 billion
2. European Union 11.1% US$4.3 billion
3. United States 10.1% US$3.9 billion
4. India 9.7% US$3.7 billion
Phosphate fertilizers
1. India 19.4% US$5.2 billion
2. Brazil 17.3% US$4.6 billion
3. European Union 9.7% US$2.6 billion
4. United States 7.6% US$2.0 billion
Potash fertilizers
1. China 18.6% US$3.9 billion
2. Brazil 17.7% US$3.8 billion
3. United States 17.5% US$3.7 billion
4. European Union 7.9% US$1.7 billion

Fonte: Source: WTO

The CNA has noted that the terms of trade have worsened, forcing farmers to sell more bags of soybeans and corn just to buy the same volume of inputs. Spending on fertilizer imports has risen, even as the supplier mix has shifted, with China taking a growing share. That, the CNA says, only underscores how strategically important fertilizer is to the competitiveness of Brazilian agribusiness—and the need for better risk management, supplier diversification and more informed purchasing decisions.

Since the war between the U.S. and Israel against Iran broke out, followed by Iranian retaliation against countries in the region, fertilizer producers have imposed export restrictions affecting as much as 15% of global fertilizer trade, according to WTO estimates.

China is a case in point, the organization notes. Beijing initially tightened export controls on several fertilizers and inputs, including urea and sulfuric acid, before later allowing limited urea exports under a quota system.

Russia added extra export quotas and suspended export licenses for ammonium nitrate. Turkey imposed a temporary ban on sulfur exports. Since sulfur and sulfuric acid are key inputs for phosphate fertilizers, such restrictions can squeeze fertilizer availability even without directly targeting finished products.

Meanwhile, international competition for fertilizer supplies has intensified. The U.S., the European Union and Turkey, for instance, have suspended import tariffs to shore up domestic supply.

The WTO says several economies have rolled out short-term subsidies to help farmers absorb rising production costs, including fertilizer, while also pursuing longer-term measures to boost domestic production and encourage more efficient fertilizer use.

The European Commission approved a Fertilizer Action Plan backed by a €540 million package from its agricultural crisis reserve, while the United States has announced plans to expand domestic fertilizer production.

India subsidizes fertilizer through a $4.5 billion program focused on urea, plus a separate nutrient-based subsidy covering non-urea phosphate, potash and nitrogen fertilizers. The country has also given the fertilizer industry priority in natural gas allocation, guaranteeing plants at least 70% of their average consumption needs.

Other economies—including Brazil, Kenya, Ghana, Sri Lanka, Armenia and Thailand—have also recently rolled out measures affecting the fertilizer sector.

Writing for the World Economic Forum, Svein Tore Holsether, chief executive of Norwegian crop nutrition, ammonia and industrial solutions company Yara International, argues that global food production will keep depending on energy security, industrial capacity and the smooth functioning of global trade routes.

Conflicts, volatile energy prices and disruptions to international trade, he notes, are increasingly shaping fertilizer markets, farming costs and global food output—since fertilizer manufacturing relies heavily on natural gas, raw materials and global shipping lanes, all of which geopolitical crises hit directly.

Holsether stresses that the fallout from these shocks isn’t always immediate, which makes the risks harder to spot. Because fertilizer has to be applied at specific points in the crop cycle, cutting back or delaying its use can drag down yields in the following harvest—losses that can’t be made up later.

Source: Valor International/ Valor Econômico

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