How dependent is Brazilian agriculture on fertilizer imports?

Agricultural inputs are products or services used to ensure the nutrition, protection, and development of crops, ranging from seeds and pesticides to machinery and labor. Within this group of products and services, fertilizers stand out, as they provide the nutrients necessary for crop development. This type of input is essential for providing essential nutrients for agricultural production, such as macronutrients (nitrogen, phosphorus, and potassium) and micronutrients (boron, chlorine, zinc, among others).

In Brazil, where much of the geographic area is covered by the Cerrado—more than 200 million hectares—this input is even more important. The biome presents several natural constraints to agricultural production, as it has acidic soils with low fertility, making the use of fertilizers essential for food production. However, Brazil still needs to source most of this input from outside its borders, making production more exposed to external shocks.

According to the Federal Government, the most widely used fertilizers in the country are primary macronutrients: nitrogen (N), phosphate (P) and potassium (K) fertilizers, which can be applied separately or in combination. NPK complex. According to the FAO, in 2023, Brazil produced around 500 thousand tons of nitrogen, 1,95 million tons of phosphorus and 215 thousand tons of potassium.

The FAO also points to a high import dependence, which is confirmed by analyzing the import-to-consumption ratio, which was over 90% for the NPK complex in 2023. This high import dependence is reflected in Brazil's productive inefficiency; production-to-consumption metrics are close to 8% for nitrogen, 44% for phosphorus, and 3% for potassium. In 2024, according to data from the Secretariat of Foreign Trade (SECEX), Brazil imported a total of 44 million tons of the NPK complex, of which approximately 37% was nitrogen, 11% phosphorus, 32% potassium, and 20% other nitrogen, phosphate, or potassium varieties.

Brazil's high import value of fertilizers translates into a trade imbalance. According to SECEX, in 2024, the total value of fertilizer exports from the complex was approximately US$278 million, while the total value of imports was approximately US$13,5 billion, a deficit of approximately US$13,2 billion.

This need to import a large volume of fertilizers incurs costs and greater risk for Brazilian producers: these products' costs are pegged to the dollar, and fertilizer costs are highly sensitive to exchange rates and external shocks. According to Conab, in 2024, fertilizers represented, on average, 23% of total costs for soybean, corn, and cotton crops. In 2023, this proportion of the total cost of coffee production was 24%.

In 2022, for example, the outbreak of the conflict between Russia and Ukraine led to a surge in the dollar and fertilizer prices, given that Russia and Eastern Europe are important global suppliers of these inputs. According to the World Bank, the international price of urea—the main source of nitrogen fertilizers—rose more than 100% between late 2021 and mid-2022. This situation was further exacerbated by the fact that a significant portion of the NPK consumed in Brazil comes from Russia.

With heavy dependence on the foreign market, fertilizer production in Brazil has been gaining strategic importance. In the public sphere, the National Fertilizer Plan (PNF) was enacted in 2022 with the aim of reducing the country's dependence on imports of these inputs by seeking to increase domestic production. Measures such as attracting direct investment in mines and factories, encouraging R&D, and improving infrastructure and logistics are some of the PNF's guidelines. The goal is to meet approximately 2050% of Brazil's fertilizer demand by 50 through domestic production, primarily of the NPK complex, but there are also guidelines for increasing the production and use of organic and organomineral compounds. As a result of the PNF, the last three years have seen increased investment in the sector, such as the resumption of construction of factories by Petrobrás in Araucária (PR) and Três Lagoas (MS).

In the private sector, several projects stand out. Of these, five are privately funded and have the potential to reduce external dependence on fertilizers: Santa Quitéria (CE), Tiros and Uberaba (MG), Lavras do Sul (RS), and Autazes (AM). The latter involves the structuring of Potássio do Brasil's Autazes Project, which involves the construction of Brazil's largest potassium exploration complex, complete with mines, factories, and ports. This project is expected to produce approximately 2,5 million tons of potassium at the start of operations, 100% of which will be destined for the domestic market.

This shift in the country's quest for efficient fertilizer production, in addition to meeting part of domestic demand, leads to greater predictability for producers. In recent years, we have seen an escalation of military conflicts and economic sanctions in key fertilizer-producing regions such as Russia, Ukraine, and the Middle East, in addition to the US-China trade war, which also affects supply chains and prices. This phenomenon creates uncertainty about supply and prices for Brazilian producers due to possible rearrangements in supply chains.

The reality of Brazilian fertilizer demand is complex. It involves significant external dependence, exposing products to external shocks—which becomes even more challenging at a time of rising global tensions between countries—and internal challenges, such as production capacity and even logistics, which affect the flow and prices of these inputs. Therefore, it is crucial that there be an effective strategic movement involving public and private entities that seeks to solve this problem or at least reduce external dependence on fertilizers. The PNF proposal is one such approach and indicates an improvement in supply prospects. This could result in lower costs for producers, which could even translate into increased production and productivity for Brazilian agribusiness.

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