Panel SA: There is no silver bullet to increase fertilizer production, says industry

After the recommendation to strengthen the National Fertilizer Plan made by the agriculture working group in the transition to the Lula 3 government last week, the sector celebrated, but reiterated that there is no easy solution.

“There is no silver bullet that will solve it”, says Bernardo Silva, executive director of Sinprifert (National Union of Raw Material Industries for Fertilizers). “There are a series of factors that we have been trying to revolve under different aspects.”

A tax system that privileges imports, the high cost of raw materials, the lack of a regulatory framework and the billionaire figures surrounding projects are complicating factors for the reindustrialization of the fertilizer sector in Brazil.

There was concern about maintaining the program launched in 2022 amid the shortage of fertilizers due to the war in Ukraine.

The European conflict shed light on an old problem. Brazil is the fourth largest consumer market for this type of product and imports 90% of the 45 million tons of NPK (nitrogen, phosphorus and potassium) it uses, and almost 1/4 of that volume came from Russia.

Silva and other representatives of the sector in Brazil work together with entities such as Fiesp (Federation of Industries of São Paulo) and CNA (National Confederation of Agriculture) to ensure that the plan was “embraced” by the new government.

For the sector, the stimulus program is a sign that “Brazil is serious about reducing external dependence.” Inclusion in the transition report reinforces this importance, he says. The plan envisages reducing dependence on imported fertilizer to 45% by 2050.

“For this to happen, the next governments need to transform this into public policy, of the State. These projects are all long-term, of several decades”, affirms the president of the industry union. “A one-plant project costs no less than $2.5 billion [cerca de R$ 13,2 bi]so we need this long-term vision.”

The bottlenecks in the sector today are many. In nitrogenous plants, natural gas needs to be available, and it reaches the industries in gas pipelines. In mining, it is necessary to have a railroad for flow.

“The cost of gas as a raw material needs to decrease and we need a regulatory framework that streamlines and provides legal certainty so that investors feel attracted.”

Joana Cunha with Fernanda Brigatti