However, global supplies, which already began to dwindle at the end of last year due to multiple international factors, could become scarce in the event of a protracted war between Ukraine and Russia \u2013 the top fertiliser supplier to Brazil<\/a> and other Latin American countries<\/a>.<\/p>\n Shortages caused the prices of chemicals used in fertilisers to surge in Brazil last year. Potassium chloride rose 185%, urea increased 138% and monoammonium phosphate increased 103%, according to the Brazilian Confederation of Agriculture and Livestock (CNA).<\/p>\n \u201cBrazil is already being hit hard. The products available, in many cases, have doubled in price,\u201d says Zeni. <\/div>One of the main risks of the crisis is food price inflation. \u201cThe impacts here are the increase in production costs, the reduction in the farmer\u2019s profit margin and passing on these increases to the consumer\u2019s table,\u201d says Ma\u00edsa Romanello, a fertiliser specialist with Safras & Mercado, a Brazilian agribusiness consultancy. The federal government also already predicts higher domestic food prices<\/a>.<\/p>\n Russia, the main global fertiliser supplier, accounted for 22% of Brazil\u2019s imports of the product in 2021, a total of 9.27 million tonnes, according to the Ministry of Industry, Foreign Trade and Services (MDIC). But last November, Russia imposed<\/a> nitrogen export quotas to safeguard domestic supplies.<\/p>\n Coal<\/a>, natural gas<\/a> and oil<\/a> are essential resources in fertiliser production. Many fertilisers are made by gasifying coal and combining it with nitrogen at high temperatures to form chemical compounds such as ammonia and urea that are the basis of many fertilisers, or by burning natural gas directly. Fossil fuels also power numerous manufacturing plants.<\/p>\n The producer does not have many alternatives and is hostage to international pricing, logistical issues and international policies<\/p><\/blockquote>\n These fuels reached price peaks between early and mid-2021, causing a significant cost increase for fertiliser producers and manufacturers of the inputs. The dollar also appreciated 7.47%<\/a> against the Brazilian real in 2021, hitting the country\u2019s buyers.<\/p>\n \u201cThe producer does not have many alternatives and is hostage to international pricing, the dollar, logistical issues and international policies,\u201d says Romanello.<\/p>\n At the end of 2021, Tereza Cristina Dias, Brazil\u2019s Minister of Agriculture, travelled to Russia to try to secure supplies for Brazil. She received guarantees<\/a> from the Russian government and fertiliser companies. \u201cWe will have no problems with delivery,\u201d she claimed at the time.<\/p>\n Yet, prices remained volatile, and the situation is likely to worsen due to the outbreak of war after Russia\u2019s invasion of Ukraine. Beyond the devastating human cost, the war will interrupt<\/a> the flow of goods through Black Sea ports and could lead to the total suspension<\/a> of fertiliser exports.<\/p>\n In a recent press conference, Dias said<\/a> she feared the impacts of this in the coming months: \u201cThe summer harvest, which will be at the end of September or October, is a concern.\u201d<\/p>\n Market analysts also say sanctions imposed on Russia by Europe and the US are expected to further destabilise supplies. \u201cWith retaliation from the west, the supply of fertilisers will become even more complicated. The price of food may increase a lot,\u201d says C\u00e9sar Castro, a specialist at Ita\u00fa BBA\u2019s Agro consultancy.<\/p>\n China is Brazil\u2019s second top supplier of fertiliser, accounting for 15% of imports in 2021, according to MDIC data. Yet, China also tightened its export policy in the third quarter of last year, driven by its energy crisis.<\/p>\n In the context of global shortages and high international prices, Chinese fertiliser producers began to favour<\/a> the international market over the domestic one. However, to avert a domestic supply crisis, China limited fertiliser exports at the end of last year, and overseas sales fell<\/a>.<\/p>\n \u201cChina has opted to meet the domestic market. We need to wait until April to know if it will return to exporting [as before],\u201d says Castro. <\/div>For now, Brazil has managed to maintain imports, possibly because the country is the largest consumer<\/a> of Chinese inputs and is sourcing increasing amounts from the Asian country. Brazil bought<\/a> 450,000 tonnes from China in January 2022, compared to 413,000 in the same month last year.<\/p>\n China\u2019s promises to reduce its carbon footprint in the coming years could also affect the international fertiliser market. The country\u2019s production still relies heavily on coal, which is highly polluting and energy intensive.<\/p>\n Last year, China\u2019s energy crisis led to an increase<\/a> in coal production. But the country has pledged to reach peak carbon emissions by 2030, a climate target reaffirmed during COP26<\/a> last November. According to China\u2019s 14th Five-Year Plan<\/a>, its quinquennial blueprint for development launched in March 2021, the country is expected to reduce coal use and impose restrictions on high emitting and consuming industries in the coming years.<\/p>\n Belarus is another important supplier of fertilisers, particularly potash, to Brazil. However, Belarus has been feeling a series of sanctions imposed by the US<\/a> and Europe<\/a> since August 2020, following the contested return to power of Aleksander Lukashenko and, more recently, because of his support for Russia\u2019s invasion of Ukraine.<\/p>\n The Eastern European country accounts for 20% of global exports, ranking as the third largest potash producer in the world. However, it now faces major difficulties in shipping the product due to the closure of European ports.<\/p>\n \u201cPotash had already been experiencing low availability due to plant maintenance and the closure of two important mines of Mosaic [the Canadian mining company]. The sanctions aggravated the situation, generating lower availability and high prices,\u201d explained Romanello. Potassium chloride, the most common chemical base of potash, leapt from US$250 a tonne in early 2021 to $800 in 2022 \u2013 record highs.<\/p>\n Brazil was once less dependent on fertiliser imports but these have grown substantially since 2015, according to MDIC data. This was due to state company Petrobras\u2019 disinvestment<\/a> in the sector after sprawling corruption scandals increased its debt and forced asset sell-offs. Several of its nitrogen production units closed in recent years.<\/p>\n \u201cWe are left hoping that multinational companies buy these plants to produce in Brazil, as happened at the beginning of February, with the acquisition by the Russian group Acron of the Petrobras Nitrogenated Fertiliser Unit (UFN3) in Tr\u00eas Lagoas [Minas Gerais state],\u201d says Romanello.<\/p>\n The federal government also plans to launch the National Fertiliser Plan. It expects to reduce imports from 84% to 60% in three decades, which is unlikely to resolve its dependence on the foreign trade. Among the proposed measures, it intends to seek new mineral deposits within Brazilian territory.<\/p>\n The situation has given President Jair Bolsonaro another opportunity to defend mining on indigenous lands. He called for the approval of Bill 191, currently being debated in congress, which would open these protected areas to mineral exploration. The proposed law faces criticism from environmental groups<\/a> for its potential impacts on indigenous peoples and biodiversity.<\/p>\n \u201cIn 2016, as a deputy, I spoke about our dependence on potash from Russia. I cited three problems [to greater Brazilian self-sufficiency]: environmental, indigenous and those that own the exploration rights at the mouth of the Madeira River,\u201d the president tweeted<\/a> on 2 March. \u201cOnce [the bill] is approved, one of these problems will be solved.\u201d<\/p>\n After the president\u2019s call, congress could even debate<\/a> the bill this Tuesday (8th). Minister Dias was also in favour<\/a> of mining on indigenous lands to minimise the fertiliser crisis, but she is mainly betting on diversifying international suppliers.<\/p>\n For Romanello, the most viable way out is to seek more external partnerships, such as Canada for potash and Morocco and Saudi Arabia for phosphates. \u201cFor nitrogenous [fertilisers], the situation is more delicate, especially for ammonium nitrate, practically the entire volume of which Brazil imports from Russia,\u201d she says.<\/p>\n Global fertiliser supply bottlenecks have further exposed the dependence on chemical inputs for Brazilian crops. The use of fertilisers is one technological advance that serves to increase productivity<\/a>, especially of grain crops such as soy, whose planted area expands year by year in the country, driven by domestic and global demand. Soy farming also leads to soil degradation that is compensated<\/a> for by increasing fertiliser use.<\/p>\n Today, reducing the amount of agricultural inputs inevitably leads to reduced production. In the face of price and foreign supply uncertainty, this is exactly what analysts and farmers expect to happen.<\/p>\n \u201cThe indications are that producers should reduce the amount applied in the 2022\u201323 harvest,\u201d says Ana Paula Kowalski, an agronomist at the Agriculture Federation of the State of Paran\u00e1, one of Brazil\u2019s largest grain-producing states. \u201cAnd many will reduce fertilisation without technical knowledge, potentially affecting even more crops’ productivity.\u201d<\/p>\n Castro, from Ita\u00fa BBA Agro, agrees. For him, producers will \u201chold back\u201d on the use of fertilisers, putting productivity at risk. \u201cWe have never seen this before, because it is not common to use the minimum [amount of fertilisers],\u201d he says.<\/p>\n Evandro Ghellere, a farmer, intends to reduce the amount of inputs in growing crops on his 40-hectare property in S\u00e3o Miguel do Igua\u00e7u, Paran\u00e1, despite knowing that this could compromise productivity.<\/p>\n \u201cThere\u2019s no way I can use the same amount as in past harvests,\u201d he says, still trying to comprehend the rising production costs. \u201cIf before I used to use 15 bags [of fertiliser] per bushel, now I\u2019ll put ten. A 50-kilo bag, for which I paid R$80 (US$1.58) in the 2019-20 season and R$140 ($27.50) for the 2020\u201321 crop, now costs R$220 ($43.32).\u201d<\/p>\n \u201cWe don\u2019t know what will happen in 40 days, what the price will be, and if there will be [fertiliser] available,\u201d says Zeni, summing up the deep uncertainty among Brazilian farmers.<\/p>\n","protected":false},"excerpt":{"rendered":" Energy crisis in China and sanctions on Belarus already limited supplies of key fertilisers and elevated prices. Brazil\u2019s farmers and consumers fear worse is to come.<\/p>\n","protected":false},"author":3882,"featured_media":50051584,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[763],"tags":[13887,50040317,546,50029817,600],"hashtags":[],"country":[50000021,50040733],"class_list":["post-50051562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-food","tag-conflict","tag-farming","tag-food-security","tag-supply-chains","tag-trade","country-brazil","country-ukraine"],"acf":[],"yoast_head":"\n![\"Claudio](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/03\/Claudio_Zeni_1.jpeg\")
Restricted Russian supply<\/h2>\n
China\u2019s energy crisis and climate targets<\/h2>\n
![\"A](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/03\/Evandro_Ghellere_4.jpeg\")
Belarus sanctions<\/h2>\n
Brazil mining on indigenous lands<\/h2>\n
![\"aerial](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/02\/Vale_Complexo-S11D_02_Credit_-Ricardo-Teles_-Agencia-Vale-scaled.jpg\")
<\/a>Reduction of inputs and productivity<\/h2>\n
![\"Evandro](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/03\/Evandro_Ghellere_3.jpeg\")