São Paulo – Brazil’s agricultural sector is bracing for potential disruption as the escalating conflict in the Middle East sends fertilizer prices soaring, prompting concerns over supply and a shift towards cheaper alternatives. Agriculture Minister Carlos Favaro warned on Tuesday that the U.S.-Israeli war on Iran has already triggered price increases for urea, a key fertilizer, within days, with some sellers even halting sales despite existing inventories.
The situation highlights Brazil’s vulnerability to geopolitical instability, particularly as it relies heavily on fertilizer imports to fuel its vast agricultural output. In 2025, the country imported a record 45.5 million metric tons of fertilizers, underscoring its dependence on global supply chains. Roughly one-third of the world’s seaborne fertilizer trade passes through the Strait of Hormuz, making it a critical, and now increasingly precarious, transit point.
Rising Prices and Market “Opportunism”
Minister Favaro criticized what he described as “opportunism” in the market, noting that existing fertilizer stocks within Brazil are being repriced despite not reflecting new acquisition costs. “It’s a concern, naturally,” Favaro said, according to reports. “There is a sense that there is a certain opportunism in the market, after all, stocks already present in Brazil have been repriced. That makes no sense.” The price of urea delivered to Brazil has jumped approximately 35% in just two weeks, according to StoneX, a brokerage firm.
This rapid price increase is pushing Brazilian farmers and importers to consider cheaper alternatives, such as ammonium sulfate, even though it has a lower nutrient concentration than urea. Data from StoneX shows that Brazil’s urea imports fell by 33% in the first two months of the year compared to the same period last year, while ammonium sulfate imports rose by 19%.
Impact on Brazilian Agriculture
Urea is a widely used nitrogen fertilizer in Brazil due to its high nutrient concentration, which typically justifies its cost. Even though, the current price surge is forcing farmers to make difficult decisions, particularly as agricultural export prices have also been declining. “Lower prices for Brazil’s agricultural exports have added to the tough decisions now facing farmers,” said Tomas Pernias, an analyst at StoneX, in a report. The situation poses a significant risk to Brazil’s agricultural sector, a cornerstone of the nation’s economy.
The disruption in fertilizer supply comes at a sensitive time for Brazil, which is a major global exporter of soybeans, corn, and other agricultural commodities. A prolonged conflict in the Middle East could exacerbate the situation, leading to broader risks for the country’s farm sector. The potential for further shipping disruptions around the Strait of Hormuz, a vital waterway for global trade, adds to the uncertainty.
A Broader Regional Concern
Brazil isn’t alone in facing these challenges. The conflict’s impact on fertilizer prices and supply chains is being felt globally, particularly in countries reliant on imports. The situation underscores the interconnectedness of the global food system and the vulnerability of agricultural production to geopolitical events. Brazil’s Minister of Agriculture and Livestock, Carlos Favaro, recently visited China to discuss soybean trade, signaling the country’s proactive approach to securing its agricultural interests amid global uncertainties.
The Brazilian government is closely monitoring the situation and exploring potential solutions to mitigate the impact on farmers. While the immediate focus is on securing alternative fertilizer supplies and stabilizing prices, the long-term implications of the conflict could necessitate a reevaluation of Brazil’s fertilizer import strategy and a greater emphasis on domestic production.
The next key development to watch will be the evolution of the conflict in the Middle East and its impact on shipping routes and fertilizer production. Brazilian officials are expected to provide further updates on the situation in the coming weeks, as they perform to ensure the continued stability of the country’s agricultural sector.
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