An agricultural economist with Purdue University says the longer the flow of fertilizers is disrupted through the Strait of Hormuz, the greater the impact to Brazilian agriculture.
During a recent webinar hosted by the International Food Policy Research Institute (IFPRI), Joana Colussi says Brazil imports nearly all of its urea needs, of which 40% of the global market moves through the Strait.
“Local urea prices in Brazil jumped about 35%.” She says, “Also, when the conflict began, less than 30% of farmers bought fertilizers in Brazil for the next crop season.”
The country also imports about 75% of its phosphate needs. She says much of the supply of both inputs should be arriving between now and September.
“Fertilizers as a whole, they matter more to Brazil’s cost structure than it does, for example, in the U.S.” She says, “Farmers there depend heavily on fertilizers to keep soils productive and sustain yields.”
Colussi says the elevated prices are squeezing already tight margins for most Brazilian farmers and says a prolonged disruption of the market could influence planting decisions and acreage this fall.
