Russian blockade may cause nitrate shortages in Brazil

The suspension of Russian ammonium nitrate (NAM) exports for two months increases the likelihood of shortages of the product at the Brazilian market, according to Marcelo Mello, fertilizers director at consultancy StoneX.

“The blockade has an immediate impact in Brazil. The likelihood of NAM scarcity is very high. We were already at risk of not importing enough nitrate before the suspension, given that Brazil is a significant global consumer of the product and that, to meet domestic demand, we would have to import nearly 70% of Russia’s expected output for the first semester. The situation has now become even more complicated, “Mello stated.

Brazil imports approximately 1.5 million tons of NAM each year. Roughly 98 percent of this volume is from Russia.

The Russian government announced a ban on NAM exports this Wednesday, February 2nd, until April 1st.

The Russian Ministry of Agriculture claimed an additional need for fertilizer in the domestic market due to the late spring harvest. According to the ministry, the restriction will ensure an adequate supply of NAM to local farmers while also preventing price increases.

The country had already adopted quotas to limit exports from December to May. As a result, the export of NAM was restricted to 745 thousand tons, down 58% from the previous year.

Market

In Mello’s assessment, the market was taken aback by Russia’s decision to temporarily suspend exports, as the country had imposed quotas on foreign sales of the product until May.

In Brazil, the effects should be more severe for the sugarcane and coffee industries, which are the industries that use NAM the most and have long fertilization cycles. The operations in sugarcane fields will begin despite the Russian ban. Outside of the window of Russian restrictions, the most prolonged fertilization period for coffee is from mid-June to October.

Source: Canal Rural

To read the full original article, please see the link:

https://www.canalrural.com.br/noticias/economia/desabastecimento-nitrato-de-amonio-brasil/ 

Sharing is caring!