Russia Calls for Suspension of Fertilizer Exports Due to War in Ukraine; Bolsonaro is under pressure

The Russian government has recommended fertilizer manufacturers to suspend their exports.

The measure may directly affect Brazil, a major importer of these inputs from the country that invaded Ukraine on the 24th. And it is yet another diplomatic embarrassment for the government of Jair Bolsonaro, president who went to Russia a week before the war with the justification of guaranteeing the flow of fertilizer to the country.

The reason for the decision, according to a note from the Ministry of Industry and Commerce, is the disorganization of the export logistics chain.

With draconian sanctions imposed on various sectors of Russia’s economy as punishment for the war, Western carriers have suspended their business with the country. Thus, container ships, trucks and other parts of the gear that takes the product to its destination no longer operate in Russian ports.

“Faults in the shipment of fertilizers can directly affect the national security of several countries and cause serious consequences in the form of food shortages for hundreds of millions of people in the medium term,” reads the ministry’s note. In Brazil, the government takes food inflation for granted.

“We recommend temporarily suspending the shipment of Russian fertilizers for export until the carriers resume rhythmic work and provide guarantees for the implementation of deliveries,” he added.

The impact for Brazil still needs to be measured. According to sheet heard from a businessman in the sector in Moscow, there has not yet been an edited technical standard to explain how the suspension will be implemented.

Thus, there may be some alternatives of direct export, without going through western channels, and perhaps even through neutral countries – although this will certainly disorganize and make deliveries more expensive.

The Ministry of Agriculture said that the measure “in principle is not yet affecting trade” in inputs. The folder said that a ship from the Russian company Acron departed this Friday for Brazil – as Moscow’s decision only took place in the late afternoon (late morning in Brasilia), it is unlikely that such a shipment would be affected.

Brazil imports 23% of its phosphate and nitrogen fertilizers from Russia, and 3% from the Belarusian dictatorship, also under sanctions due to its involvement in the Ukraine war on the side of ally Moscow.

Brazilian agribusiness is the fourth largest consumer of the product in the world, behind China, India and the United States. It is the most important product in the Brazil-Russia trade chain, accounting for about 60% of the US$5.9 billion imported from Russia in 2021.

The decision is a slap in the face to Bolsonaro, who spent his trip to Moscow on February 15 and 16 justifying the need to establish more solid and long-term contracts with the Russians. He became famous for offering “solidarity” to Vladimir Putin a week before the attack on Ukraine, and in practice saw nothing signed in the field.

Assuming the problem with the war, now Bolsonaro took advantage of the crisis to suggest one of his obsessions, to remove legal obstacles to mineral exploration in indigenous areas to try to mitigate the problem of lack of inputs.

There were negotiations, which had already been advanced in a visit by Minister Tereza Cristina (Agriculture) and Chancellor Carlos França at the end of 2021, for a Russian company to acquire a deactivated fertilizer factory from Petrobras, but not even that was formalized.

The strength of the agro sector in Brazil goes through fertilizers, given the intrinsic poverty of the soil in the country. Thus, 85% of what the country consumes is imported. The National Association for the Diffusion of Fertilizers believes there are stocks for three months.

The Brasilia branch collaborated