The impact of the invasion of Ukraine by Russian troops is already having an effect on Brazil’s agricultural production fields. The two countries have trade relations with Brazilian agribusiness, but Brazil depends mainly on Russian fertilizers.
Farmer Cristiano Ronconi, who produces soybeans and corn in Itambé, Paraná, says that, depending on the increase in fertilizer prices, it will be more difficult to occupy all the planting areas. “I already reduced the area by 10% in the last crop due to the cost, as the fertilizer increased by more than 200%. If there is a new high, I will reduce further. The fight (war) is theirs, but it harms us here.”
Producer cooperative leaders revealed that fertilizer manufacturers and suppliers have already withdrawn price lists from the commercial sector, which could mean an increase.
For the agronomist Ricardo Cunha, director of Fazenda Lagoa Bonita, a producer of grains and seeds in Itaberá, in the southwest of São Paulo, there is no gain for Brazilian agribusiness with the war. “Apart from the humanitarian issue, for now we only feel negative effects. Rising prices for fertilizers, especially nitrogen and potash, which were already very expensive,” he said.
Brazil depends on Russia for the supply of a large portion of the raw materials for fertilizers used in crops such as soybeans and corn, the country’s main export grains.
From Russian territory come 20% of nitrogen, 28% of potassium and 15% of those with phosphorus in their composition. Soy, the main Brazilian commodity, depends on phosphorus and potassium-based fertilizers. Corn depends on nitrogen.
In Cunha’s view, the continuation of the war will only amplify the negative effects. “We will have problems in the supply chains of fertilizers and in the export of wheat and corn from Ukraine and Russia. This could bring higher prices for these two cereals. I don’t know if (the higher price) will offset the increased cost for farmers,” he said.
Farmer Emílio Kenji Okamura, director of the Agricultural Cooperative of Capão Bonito, which brings together soy, corn and wheat producers in southwestern São Paulo, also believes that the war will affect the supply of fertilizers. “There may be an increase, if not now, in the second half.”
Likewise, he believes in an increase in corn and wheat prices. “Ukraine is the fifth country in corn production, but the major producers are the United States, China, Brazil and Argentina. These countries can guarantee stocks. With wheat, the world depends heavily on Russia. If they hold the product in the domestic market as a precaution, we don’t know how it will turn out and where the price will end up.”
The rise in the price of wheat could affect products such as bread, pizza and pasta.
Corn
In the case of corn, Ukraine is among the four largest exporters, behind countries like Argentina, Brazil and the United States. If, on the one hand, Brazilian producers can benefit from higher prices due to lower exports of Ukrainian production, on the other hand, chicken, egg and pork producers will feel the impact of the cost of corn on feed.
Cattle rancher José Fernandez Lopez Netto, a beef cattle breeder in Itapeva, in the interior of São Paulo, believes that, without taking into account the tragic aspects of the conflict, the war may even favor the Brazilian beef market – the country is the largest exporter of the world. “Unlike other producing countries, Brazilian cattle are raised on pasture. In most parts of the world, cattle are produced in stables and will suffer from the high cost of grain, in addition to the energy consumed during the winter.”
The biggest buyer of domestic meat is China, however, according to the rancher, Iran and other markets are opening up. “The war messes with the dollar, and all commodities go up. There is an impact on the cost of beef production, but the price of meat also rises. For beef, the trend is to improve,” he said.
For the president of the Soy and Corn Producers Association of the State of Mato Grosso (Aprosoja-MT), Fernando Cadore, the war has already affected some sectors of agricultural production. “The first impact is on the price of oil and, consequently, of fuels.”
If grain exports from the two conflicting countries are affected, Cadore analyzes that the market could be supplied by other producing countries, such as Brazil, Argentina and the United States. In this case, Brazilian production would be favored by higher demand.
In his view, Brazil’s importance on the world stage increases. “War or no war, the citizen needs to eat and Brazil has production to guarantee food security.” The information is from the newspaper. The State of São Paulo.
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