Brazil is searching for new fertilizer suppliers as the war in Ukraine threatens to cut off shipments to one of the world’s breadbaskets, with potential ripple effects on already high global food inflation.
The Latin American country is the largest producer of coffee, soybeans and sugar, and the most dependent of the world’s agricultural superpowers on imported fertilizer. Brazil imports some 85% of its fertilizers and about a fifth of those imports come from Russia. The Russian trade ministry has called for a broad suspension of fertilizer exports, state news agency TASS reported Friday.
“Brazil depends on fertilizers…it’s a sacred question for us,” President Jair Bolsonaro told reporters earlier this week, defending his decision to maintain cordial relations with Moscow as Russia attacks Ukraine. Mr. Bolsanaro was one of the last world leaders to visit Russian President Vladimir Putin before the invasion of Ukraine began on Feb. 24, meeting with him at the Kremlin on Feb. 16.
If Brazil’s farmers have to pay significantly more for fertilizer or are unable to produce as many crops, the cost of its agricultural products is likely to climb, driving up world food prices.
Brazil is also an important supplier of corn and beef. Higher grain prices increase animal-feed costs, which are passed on to consumers, who have to pay more for meat and other animal products.
Before the Ukraine conflict, farmers across the world were struggling to buy enough fertilizers, some of which more than doubled in price last year. Higher natural-gas prices hampered production of the ammonia needed for nitrogen fertilizers, while power outages at Chinese fertilizer plants and Hurricane Ida in the U.S. curtailed global production.
War in Ukraine and sanctions on Russia have made the situation worse, industry analysts said, raising the prospect of a prolonged global supply crunch that would further stoke inflation and hunger among the world’s poor.Ukraine and Grain: Why Conflict With Russia Is Driving Up Wheat Prices
Russia, which accounts for about two-thirds of the world’s ammonium nitrate production according to commodity analysts at S&P Global, has halted exports until April to guarantee supplies for farmers at home. Higher natural-gas prices as a result of the conflict have also pushed up prices for the product, which is used to increase the yields of crops such as corn and wheat.
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“No one knows what’s going to happen,” said Ricardo Arioli, a soybean farmer from Brazil’s center-west state of Mato Grosso. “War means a total lack of certainty. The cost of production becomes a big unknown,” he said.
Brazilian Agriculture Minister Tereza Cristina Dias said she was planning to travel to Canada this month to secure more supplies. Canada is the world’s largest producer of potash fertilizers, followed by Russia and Belarus.
Ms. Dias said Brazil has enough stocks to last farmers until October. Not everyone agrees.
The Brazilian National Fertilizer Association, which represents fertilizer companies in this country, has warned that local fertilizer stocks will only last for another three months. Sanctions and travel restrictions have hampered shipments to Brazil, the group said.