The closing of three Petrobras fertilizer plants during the governments of Michel Temer (MDB) and Jair Bolsonaro (PL) increased Brazil's dependence on fertilizers from Russia. The country ruled by Vladimir Putin is where 23% of the import of this type of product comes from, according to data from the Ministry of Economy.
Russia invaded Ukraine a week ago . Brazil did not condemn the act, maintaining a neutral position regarding the military operation.
In a press conference on Sunday (27) , President Bolsonaro said he intends to maintain a certain "balance" on the conflict precisely because of Brazil's dependence on Russian fertilizers. “For us, the fertilizer issue is sacred,” he said.
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Import of fertilizers
Data from the National Association for the Diffusion of Fertilizers (ANDA) tabulated by the consultancy StoneX indicated that, still in 2020, about 84% of the fertilizers used by Brazilian farmers were already imported. This percentage of imports is the highest ever recorded in more than 20 years – and is expected to increase.
“We don't have consolidated data for December, but the percentage of imports should reach 85%,” said StoneX analyst Luigi Bezzon.
Table compares national production and imports of fertilizers in Brazil from 2000 to 2020 / Brasil de Fato
In 2015, when Petrobras' fertilizer plants were active and under the state's control, this percentage was around 73% . Since then, however, national production has only fallen, and demand for them has only grown.
Brazil consumed 30 million tons of fertilizers in 2015. In 2020, consumption was 40 million tons . In 2021, according to StoneX estimates, it will reach 45.5 million tons.
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did not make a profit
Petrobras decided to leave the fertilizer production market in 2016, after President Michel Temer (MDB) became president. The decision was part of a business plan by the state-owned company, drawn up after the impeachment of Dilma Rousseff (PT).
At that time, Petrobras claimed that producing fertilizers caused losses. Because of this, he first decided to deactivate two fertilizer factories he had in the Northeast .
The decision was announced in March 2018 and affected the nitrogen fertilizer plants in Bahia (Fafen-BA), located in the Camaçari petrochemical complex, inaugurated in 1971, and in Sergipe (Fafen-SE), in Laranjeiras, activated in 1982.
In November 2019, Petrobras leased the two plants to Proquigel Química SA. The company, however, was only able to reactivate their production in 2021 .
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Other closed units
Since 2016, Petrobras has also closed the Paraná Nitrogen Fertilizer Factory (Fafen-PR) , in Araucária. The closure took place in February 2020, during the Bolsonaro government. The decommissioning of the factory, which had been purchased in 2013, caused the dismissal of around 1,000 workers.
Also during this government, Petrobras sold the Nitrogen Fertilizer Unit (UFN3) in Três Lagoas, Mato Grosso do Sul, to the Russian business group Acron. The plant was under construction. The announcement of the sale was made by the Minister of Agriculture, Tereza Cristina, in February this year.
Russian performance in the international fertilizer market / Brasil de Fato
sovereignty issue
Gerson Castellano, petrochemist and director of the Unique Federation of Oil Workers (FUP), reported that workers contested Petrobras' decision to stop producing fertilizers and warned of the risks this would bring to Brazilian agriculture. The warning, however, was ignored, including by rural producers.
“The issue of sovereignty was never thought of, the risk of conflicts making these products no longer available to us,” said Castellano, who fears that the war between Russia and Ukraine will jeopardize the shipment of Russian fertilizers to Brazil. “I think it was a lack of preparation on the part of the government and agribusiness”, he evaluated.
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who will pay the bill
Castellano stressed that agribusiness will not be the main affected by a possible lack of fertilizers. He said that rural producers will pay more for fertilizers if necessary and will pass the cost on to the population.
“Agribusiness will pass it on to its price,” he said. “Who will have problems is the entire population, who will pay this inflation”, he pointed out.
StoneX's Bezzon said that during 2021, the price of fertilizers on the international market had already risen by around 200%, even before the conflict between Russia and Ukraine broke out.
He explained that Brazil has not yet been so affected by this increase, as it occurred mainly after September, when Brazilian purchases were already closed. However, he estimates, for 2022, a severe impact on input costs.
Bolsonaro targets indigenous people
O presidente Bolsonaro usou sua conta no Twitter para falar do impacto que a guerra entre Rússia e Ucrânia poderá trazer à agricultura nacional. He even defended the liberation of mineral exploration of indigenous lands to obtain potassium, used as fertilizer.
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