America’s reliance on imported fertilizers is lower than Brazil’s on nitrogen and phosphate and higher on potassium, according to Gary Schnitsky, a professor at FarmDoc at the University of Illinois, a group of agricultural economists in the US Midwest. In terms of nitrogen, the US imports 12.5% of its consumption and Brazil, 95%. For phosphates, the volume imported by the US accounts for 9% of consumption, while in Brazil it reaches 75%. As for potash, the US imports 93% of its consumption and Brazil 91%.
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Fertilizer Terminal in Paranagua (Photo: Manoel Marx / Ed. Globo)
“If there is a break with Russia with sanctions, it will drive up prices in both places, but the most direct impact on Russian supply issues is greater in Brazil than in the US,” Schnitsky said at a news conference. Referring to nitrogen. The same is the case with Phosphate.
For potash, Canada is the largest supplier to both the US and Brazil, and Schnitkey indicated that there are limits to how the country can increase or redirect its supply. The Ministry of Agriculture is in talks to increase imports from Canada.
“Getting ready to produce more fertilizer is not a quick task. There are a lot of fixed costs associated with mining operations. I am sure Canada and others will increase production levels, but another issue is that the chain is not a supply chain. Ready to follow the path (increased flow to Brazil),” he said.
“To change the supply chain so rapidly, as we saw with Covid-19, is not an easy thing to do. (…) Brazil will obviously have more supplies, but I don’t see it as How could get what was produced in Russia.”
