Insight Focus
Brazil has shifted focus to domestic fertiliser production amid international instability. Petrobras restarted two plants in January, while private companies are expanding capacity across the sector. These efforts aim to reduce reliance on imported fertilisers.
Brazil has established itself as one of the most competitive agricultural sectors in the world, but it still faces a challenge: its dependence on imported fertilisers. Approximately 85% of all fertilisers used in Brazil come from abroad.
Limited infrastructure for the distribution of natural gas, an essential input for fertiliser manufacturing, is a major bottleneck. The intensive capital required for constructing industrial plants in the sector, coupled with the generally competitive price of imported products, represents another challenge.
The strong growth of agribusiness has also accentuated the mismatch between national supply and demand. Over the last 10 years, imports totalled approximately USD 129 billion, making agricultural inputs the second-largest item in Brazil’s import portfolio, behind only petroleum fuel oil.
Source: Comex
In 2022, importers brought forward fertiliser purchases due to the outbreak of the war between Russia and Ukraine, countries that are major suppliers of agricultural inputs — prices skyrocketed throughout the year.
Last year, tensions in the Middle East, including temporary production stoppages in countries like Iran and Egypt, also drove prices higher. At the same time, global demand remained strong. For urea, a key fertiliser, the price increase reached almost 22% compared to 2024.
Source: Comex
Faced with growing demand for fertilisers, which are subject to geopolitical instabilities affecting prices, both the private sector and the government are beginning to invest more in local production.
In January, Petrobras resumed production of nitrogen fertilisers at its plants in Sergipe and Bahia — operations that had been suspended in recent years due to the company’s divestment plans.
Together, the two plants are expected to produce 3,100 tonnes/day of urea, equivalent to 12% of the national market, according to Petrobras. Although there are doubts about the long-term strategy for resuming fertiliser production, since the company depends on government decisions, this type of initiative can help reduce dependence on imports.
Fertiliser production plant
In the private sector, some projects are also coming to fruition. In 2024, EuroChem, a multinational agricultural nutrition company, inaugurated an industrial complex in Minas Gerais with a production capacity of 1 million tonnes of phosphate fertilisers per year. Galvani, which also produces phosphates, announced plans to double production by 2030, reaching 1.5 million tonnes/year.
The increase in production in Brazil continues to focus on phosphate fertilisers. The segment benefits from a favourable domestic environment: phosphate is available in Brazil, and the initiatives already underway are likely to attract private capital in the short and medium term.
As a result, expectations are growing that the national industry will accelerate production more forcefully, moving beyond the current level of 6–7 million tonnes/year.
Source: ANDA
For potassium, investments depend on robust environmental and social licensing, structured financing, and legal stability. Even so, some licenses have been granted, although there are concerns regarding potential difficulties.
Nitrogen fertilisers, on the other hand, present the greatest challenge, with high capital intensity and strong dependence on competitively priced natural gas, which limits new greenfield projects and favours reactivations and partnerships in existing plants.
In short, there is private capital interest in fertiliser production, but resources should be directed to projects with clearly defined energy sources, licenses, logistics and long-term contracts.
