Middle East war seen raising costs for Brazilian agribusiness

The escalation of tension in the Middle East after U.S. and Israeli attacks against Iran is expected to raise production and logistics costs for Brazil’s agribusiness sector.

Analysts interviewed by Globo Rural said there is no forecast of a demand shock, with shipments of grains and meat to the region expected to continue, but that new maritime routes, higher oil prices and a stronger dollar are likely indirect effects in the coming weeks.

“The world today is not the same as it was on Friday [27],” said Luiz Carlos Pacheco, a senior analyst at T&F Consultoria. He and other specialists said they do not expect the conflict to drag on like the war in Ukraine, for example.

“The war between the United States and Iran affects the whole world because everyone depends on oil. It’s too big a conflict to stretch beyond 15 days,” Pacheco said.

Vlamir Brandalizze, director at Brandalizze Consulting, also said he does not expect the conflict to last long. He sees a temporary impact on exchange-traded agricultural commodity prices, alongside higher costs for fertilizers and logistics.

Fertilizer costs

“The impact of this war comes in two ways. First, in fertilizers, because Iran is a major supplier of urea to the global market and to Brazil as well. There is also an expectation of a stronger dollar, and that affects costs,” Brandalizze said.

Maísa Romanello, a fertilizer market analyst at Safras & Mercado, said that while Iran is not a major direct fertilizer supplier to Brazil, it is a key source of natural gas used by countries that export nitrogen fertilizers to Brazil, such as Qatar, Oman and Nigeria.

“All of those countries receive natural gas coming from Iran to produce urea, and if the flow of natural gas is disrupted, those countries will face reduced availability of feedstock,” Romanello said.

She added that global fertilizer prices were already on an upswing, a trend she expects to intensify in the coming weeks. “The market had already been pricing in these geopolitical issues, not only in Iran but also in Russia, and alongside other factors, such as China restricting supply to keep product in the domestic market,” Romanello said.

Trade flows

For shipments of Brazilian agribusiness products bound for Iran and the Middle East more broadly, the outlook is that trade will continue, albeit with higher costs and longer routes.

“At first glance, trade flows won’t be permanently broken. They’ll become more complex, more difficult, but Brazilian products should still reach their destinations,” said Fernando Iglesias, Safras & Mercado’s markets coordinator.

The region includes key markets for Brazil’s meat exports, including the United Arab Emirates, the largest importer of Brazilian chicken, which bought 480,000 tonnes in 2025, up 6% from a year earlier.

In grains, the region stands out as the main buyer of Brazilian corn. Iran was the top destination for Brazil’s corn exports in 2025, purchasing 9 million tonnes, followed by Egypt with 7.6 million tonnes.

Most shipments, however, take place between July and February, which reduces the prospects of an immediate hit to the sector. “Probably by midyear, when Brazil harvests the second corn crop and starts exporting again, the Iran issue will already be resolved,” Brandalizze added.

Source: Valor International

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