Brazil warns of fertilizer supply risks and higher prices amid Middle East war

Brazil’s Agriculture Ministry sees a “very high” risk of partial fertilizer shortages if the war in Iran continues and the Strait of Hormuz remains closed, according to technical assessments reviewed by officials.

The waterway is a key corridor for global oil and natural gas shipments and directly influences the availability and prices of inputs such as urea used in Brazilian agriculture. In the most pessimistic scenario, the ministry estimates that shortages of phosphate fertilizers could reach up to 20% of national demand this year.

Export restrictions imposed by China on fertilizer shipments also threaten supply to Brazilian farmers and could push prices higher for the 2026/27 crop season beginning in July. Officials warned that reduced fertilizer availability could cut yields of some crops by more than 20%, potentially putting upward pressure on food prices.

The assessments appear in technical reports revealed by Folha de S.Paulo on Tuesday and confirmed to Reuters by a source at the ministry. It remains unclear whether the analysis will lead to immediate policy action.

In one passage cited in the report, the ministry’s technical staff wrote that “the current and potential developments of the geopolitical scenario expose Brazil to a very high risk of supply shortages and rising domestic prices,” driven by conflict-related disruptions and market restrictions affecting logistics and raw material costs.

The documents were addressed to the ministry’s executive secretary, Irajá Lacerda. The ministry did not respond to requests for comment before publication.

Officials warned of immediate risks including rising production costs, delays in fertilizer deliveries and worsening purchasing conditions in the second half of the year. Depending on how long the conflict and logistical disruptions persist, the impact could shift from higher prices to actual shortages.

Such disruptions could affect the production of major commodities including soybeans, corn, coffee and sugarcane.

Under the most adverse scenario, ministry analysts say the federal government may need to activate “emergency agricultural financing mechanisms for the most affected crops.”

The ministry also assessed the impact of China’s restrictions on phosphate fertilizer exports through mid-2026, a measure aimed at protecting its own domestic supply. According to the analysis, Brazil could face a deficit of between 1 million and 3 million tonnes of these inputs this year, potentially “compromising productivity” in the 2026/27 harvest.

Brazil imports about 85% of the fertilizers it consumes and relies on a limited number of global suppliers. With the war and export restrictions tightening supply, the country’s dependence translates into increased risks for farmers, as fertilizers account for more than 30% of agricultural production costs.

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)

Recent data show Chinese phosphate exports have fallen to their lowest level since 2013, while China’s share of Brazil’s fertilizer imports has already declined significantly, without an immediate replacement from other suppliers.

Source: Globo Rural

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