The ninth edition of the Brazilian Fertilizer Congress, organized by ANDA, (Brazilian National Fertilizers Organization) underscored the main difficulties faced by the agriculture sector in having access to fertilizer at a time of global logistics chaos caused by the Covid-19 pandemic and Russia’s invasion of Ukraine.
As a lingering consequence of the covid-19 pandemic and a slowdown of the Chinese economy, cargo throughput in Brazilian ports fell by 3.3% in the first half of the year compared to the same period of 2021. On the other hand, the Port of Santos recorded an increase of 5.6% over the same period. The data are included in a report published by Brazil’s National Waterway Transportation Agency (Antaq).
Russia almost doubled the value of its exports to Brazil in the first half of this year and has climbed to fifth supplier of Latin America's largest economy. This despite the trade, financial and diplomatic sanctions imposed on Russia by the United States, the European Union and the United Kingdom following its invasion of Ukraine.
Brazilian president Jair Bolsonaro reiterated his opposition to economic sanctions against Russia and described the Brazilian government's position in the Ukrainian conflict as one of “equilibrium” since Brazil needs a steady supply of Russian fertilizers for its powerful agribusiness sector.
President Vladimir Putin in a phone call with Jair Bolsonaro said Russia will ensure that fertilizer trade with Brazil remains uninterrupted. Fertilizers, especially nitrogen, phosphorus, and potassium, are widely used by Brazilian farmers and have made the country a world food powerhouse.
Some 600,000 tons of fertilizer, 50% of which potash and of Russian origin were on their way to Brazil during the first week of April. Despite almost two months of war, the flow of Russian fertilizer to Brazil continues, according to consultancy StoneX.
Belarus announced that it is authorizing licenses for the export of potash beginning this month, according to the official news agency RIA. Russia's close ally is the world’s third-largest producer of potash, widely used in soy production. Belaruskali, a local state-owned company, is among the world’s leading companies in the field.
Potash prices, a key element used as fertilizer have more than trebled compared to a year ago. The mineral which was trading at US$ 300 a ton in early 2021, has now skyrocketed to US$ 1,100 a ton, and with not many prospects of returning to normal levels given the ongoing month-long war in Ukraine following on the Russian invasion.
Brazil has called for fertilizers to be excluded from the list of sanctions currently imposed as a consequence of the Russian invasion of Ukraine and ongoing fighting. Agriculture Minister Tereza Cristina Costa Dias addressing a virtual meeting of peers from countries of the Americas, including the United States, pointed out limiting or banning fertilizer trade has a direct impact on farming productivity, food availability, boosts food prices and threatens food security, mainly among the most vulnerable countries.
United States Department of Agriculture (USDA) is planning to invest an initial sum of US$250 million for the production of fertilizers in the country. USDA said the goal is the reduction of input costs, which have been strongly affected by the sanctions imposed on Russia, (a leading global supplier) and stimulate competition in the US.