https://www.gov.br/mre/en

 

Petrobras closes factories and exposes Brazil to lack of Russian fertilizers during war

 

 

STATE-OWNED COMPANY DECIDED TO STOP FERTILIZER PRODUCTION FROM 2016, INCREASING BRAZILIAN DEPENDENCE ON RUSSIAN EXPORTS

 

Vinicius Konchinski

Brazil in fact | Curitiba (PR) |

 March 2, 2022 at 7:39 pm

 

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.

:: Understand what is at stake in Russia's invasion of Ukraine ::

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 .

:: Article | Bolsonaro tears Brazil's principles with an eye on fertilizer ::

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.

Jair M. Bolsonaro

@jairbolsonaro

-POTASSIUM and our food security. -In 2016, as a deputy, I spoke about our dependence on Russia's potassium. I mentioned 3 problems: environmental, indigenous and who owned the exploratory right at the mouth of the Madeira River (there are also deposits in other regions of the country)

 

“With the Russia/Ukraine war, today we run the risk of a shortage of potassium or an increase in its price. Our food security and agribusiness (Economy) demand from us, Executive and Legislative, measures that allow us not to depend on something that we have in abundance”, wrote the president this Wednesday (2).

Castellano, from FUP, acknowledged that Brazil imports potassium to fertilize crops. He recalled, however, that Brazil would theoretically be self-sufficient in urea, also used as fertilizer, if it had not shut down Petrobras' factories.

Sought by  Brasil de Fato , Petrobras did not comment on its decision to stop producing agricultural inputs.

Minister Tereza Cristina informed a press conference held on Wednesday (2) that the government should announce a national plan on fertilizers this month to reduce Brazil's dependence on imports of this input.

Tereza Cristina said that the country's decision to stop producing fertilizers was wrong. According to her, it is even possible that imported inputs are cheaper than national ones. However, it is not reasonable for Brazil to be dependent on other countries. “Brazil needs to address this issue as national security and food security,” she said.

According to the minister, at the moment, the country does not face fertilizer supply problems. She said that, as of October, the country will need fertilizers to sow a new crop. These fertilizers are not guaranteed. That worries.

Tereza Cristina also stated that the government intends to strengthen contacts with other countries to supply a possible lack of fertilizers coming from Russia. It also intends to encourage research into agricultural production with less fertilizer.

“We have to be calm and balanced at this time,” he said. “The harvest will happen. If it had to happen today, we would have product [fertilizer] for that."

Editing: Rodrigo Durao Coelho

source google images

source writing https://www.brasildefato.com.br/2022/03/02/petrobras-fecha-fabricas-e-expoe-brasil-a-falta-de-fertilizantes-russos-durante-guerra

Tag - Petrobras - fertilizers - russia - Tereza cristina - Bolsonaro - 

ministry of agriculture - ministry of the farm - paulo guedes

Petrobras to close fertilizer factory in Araucária that generates 1,000 jobs

https://www.gazetadopovo.com.br/parana/ansa-fechamento-araucaria/

Petrobras dismantles the sector and Brazil is held hostage by Russia's fertilizers With Petrobras factories closed and privatized, Brazil becomes dependent on imports of fertilizers, necessary for food production
 

https://www.cut.org.br/noticias/petrobras-desmonta-setor-e-brasil-fica-refem-dos-fertilizantes-da-russia-ca8c