The new episodes of the war in the Middle East and the continuation of the blockade in the Strait of Hormuz expose Brazil’s fragility in the fertilizer segment, while it tries to expand national production. A study of the National Confederation of Industry (CNI) points out that the country is in a position of “extreme vulnerability” in the face of a possible global crisis in agricultural inputs — with a direct risk on costs, exports and food prices.
“Supply restrictions increase the cost of agricultural production and, consequently, the price of food”, says the superintendent of Industrial Policy at CNI, Fabrício Silveira. According to him, external dependence also compromises the competitiveness of Brazilian exports and food security.
Today, Brazil imports more than 80% of the fertilizers it consumes. Dependence is even greater on key inputs: it reaches 97.8% on potassium and 89% on nitrogen. With the maritime flow blocked, urea, one of the main fertilizers for corn, for example, has already increased by more than 50% since the beginning of the year, according to the CNI.
This scenario is the result of a deindustrialization process. Between 2002 and 2024, domestic fertilizer production fell by 30%, driven by the closure of large nitrogen factories. The production of chemical intermediates — essential raw materials — fell by 48% between 2012 and 2024, says Industry.
At the same time, dependence on a restricted number of suppliers increases the risk. Currently, Brazil buys most of its nitrogen from China, Russia and Oman; phosphates from Egypt, Israel and Morocco; and potash mainly from Russia, Canada and Uzbekistan.
Expensive gas hampers national industry
One of the main obstacles to the resumption of domestic production is the cost of natural gas, a fundamental input in the manufacture of nitrogen fertilizers.
According to the study, the average price of industrial gas in Brazil reached US$18.64 per MMBtu (Million British Thermal Units) in June this year — almost five times more than in the United States, where the average was US$3.67. The difference reduces the competitiveness of the national industry and discourages investment in the sector.
Given the scenario, the CNI defends the acceleration of public policies to rebuild the production chain. Among the main initiatives are the National Fertilizer Plan, which plans to reduce external dependence to 45% by 2050, and the Nova Indústria Brasil strategy aimed at densifying production.
The study also highlights the need to expand investments in research and innovation, especially in the development of agrominerals. The objective is to identify new deposits of potassium and phosphorus and adapt technologies to Brazilian tropical conditions.
Risk for agriculture and inflation
Brazil accounts for around 8% of global fertilizer consumption, which makes the supply of these inputs critical for the performance of agribusiness — one of the pillars of the economy.
In practice, the combination of high external dependence, concentration of suppliers and geopolitical tensions creates a risky environment for the next harvest. If global supply remains under pressure, the effect could spread from the farm to the final consumer, reinforcing the pressure on food prices. The CNI’s diagnosis is that without a reindustrialization strategy, Brazil remains exposed to external shocks in one of the most critical links in the agri-food chain.
