Insight Focus
Brazil has been hit by an increase in fertiliser prices amid the Iran war. The country’s heavy reliance on imports—particularly from Oman and Qatar, which supply around 30% of its urea—leaves it exposed as the conflict disrupts key producers and trade routes. Higher input costs are expected to squeeze farmers’ margins, with limited domestic supply offering little relief.
Brazil’s heavy reliance on imported fertilisers has raised significant concern, given the escalating prices of this input caused by the war in the Middle East. The country imports about 80% to 85% of all the fertilisers it uses, with a large share coming from the Persian Gulf region, which is the epicentre of the conflict with Iran.
Countries such as Oman, Qatar and Saudi Arabia are historical partners of Brazilian agribusiness in the supply of urea, an essential input for various crops. Last year, these countries accounted for about 30% of the urea imported by Brazil, according to Comex.
Source: Comex
The Middle East, including Iran, is one of the largest global players in fertiliser production and export. Today, about 30% of the urea traded worldwide passes through the Strait of Hormuz in the Persian Gulf, as does 44% of the sulphur used in the manufacture of phosphate fertilisers, which improve fertilisation efficiency, according to Rabobank.
With maritime traffic disrupted in the region, prices for these inputs have skyrocketed. The suspension of operations at natural gas and fertiliser plants in Qatar, due to the war, has also contributed to the wave of price increases.
On March 15, the CFR futures contract for April urea delivery to Brazil was quoted at USD 690/tonne on the Chicago Board of Trade — more than 20% above the value recorded at the beginning of the month. Compared to the price paid at Brazilian ports at the start of the year, the increase reaches 60%.
Source: Comex
In Brazil, the fertiliser purchase scenario is somewhat less critical than in the Northern Hemisphere, though it already raises significant concerns. While farmers in the US and Europe rush to secure inputs for spring crops, Brazilian producers have a wider window to make these purchases.
The demand for fertilisers in Brazilian agribusiness tends to gain strength in the second half of the year, when producers prepare for soybean planting — usually starting in September or October — and for other crops such as corn and cotton. In months like July and August, purchases usually peak.
Source: Comex
Amid the war in the Middle East, many farmers are choosing to postpone fertiliser purchases, while others are devising strategies to circumvent price increases. By early March, only 30% of the estimated fertiliser volume for the 2026/2027 harvests had been purchased, compared to an average of 40% in recent years, according to an Itaú bank survey.
Producers who have already invested in soil correction and no-till farming — techniques that increase the fertility of the planting area — can potentially use smaller quantities of fertilisers in the soybean harvest. In addition, the soybean’s own ability to fix nitrogen from the atmosphere reduces the need for more intensive nitrogen fertilisation.
Owners of more technologically advanced farms are reviewing fertiliser purchase volumes. This is the case for Eduardo Intravini, who cultivates grains on 34,500 hectares in Mato Grosso and Mato Grosso do Sul. “Since soil fertility has already been built up and we’ve invested in technology, the idea is to slightly reduce fertiliser purchases this season to cut costs,” he says.
Eduardo Intravini
Farmers are also closely monitoring phosphate and potassium fertiliser prices, which are widely used across almost all crops. The main concern is a reduction in supply. China, one of the world’s largest phosphate fertiliser exporters, has announced restrictions on foreign sales of the input at least until August to guarantee domestic supply and control prices.
Although these fertilisers have seen smaller increases than urea — with major global players located outside the conflict zone — warning signs are growing as the war drags on. On February 17, Saudi Arabia — one of the world’s largest phosphate fertiliser exporters — announced it will redirect shipments to the port of Yanbu on the Red Sea, due to the impossibility of using the Strait of Hormuz.
Source: UN Comtrade
The shipments will need to cross the country by truck, covering 1,200km, since production, managed by Maaden, occurs in Ras Al Khair on the Persian Gulf coast. A reduction in export volumes is therefore possible, tightening global supply.
Some sectors are already calculating the losses caused by these disruptions. The Mato Grosso Institute of Agricultural Economics (IMEA) estimates that a 30% increase in urea prices would raise total corn crop costs by 4.68%, as urea is required for ear development and grain filling. In other words, profit margins are expected to tighten.
At the same time, domestic fertiliser production has provided little relief for producers. Despite efforts in recent years, domestic plants meet slightly more than a tenth of the demand.
Chemical plant for production of ammonia and nitrogen fertiliser
Some producers in Bahia, Goiás, and Mato Grosso are acquiring fertilisers from two Petrobras factories that recently started operating in Bahia and Sergipe. Together, these units produce about 3,100 tonnes of urea per day, equivalent to approximately 11% of national demand, according to the company.
Petrobras plans to inaugurate another plant, Araucária Nitrogenados (Ansa), in Paraná during the first half of the year. The unit will have the capacity to produce 720,000 tonnes of urea and 475,000 tonnes of ammonia annually, used in the manufacture of nitrogen fertilisers.
With this, 20% of national nitrogen fertiliser demand could be met. The remaining 80% would continue to come from abroad. In a scenario of global disruption to the agricultural nutrient chain, this is unlikely to tame prices or significantly alleviate losses in agriculture.
