The war between Russia and Ukraine will mean that there will be no potash to meet all the global demand this year, assesses Cristiano Veloso, CEO and founder of Verde Agritech, a potash fertilizer company located in São Gotardo (MG) that announced the expansion of its production after the beginning of the conflict in Eastern Europe.
Brazil is highly dependent on fertilizer imports and Russia is the second largest producer in the world, with 19% of the market.
The sanctions imposed on the country ruled by Vladimir Putin prompted Russia to recommend fertilizer manufacturers to suspend exports in retaliation.
The conflict, combined with logistical difficulties for the customs clearance of fertilizers and the problems that already exist in the sector, make up a critical scenario for exports in 2022, in the executive’s assessment.
“Unfortunately, this year, there will not be potassium for everyone […] and who will suffer the most from this will be the simplest population, whether in Brazil or in the world. If you don’t feed the plant, it doesn’t produce what it should be producing, and when it doesn’t produce what it should be producing food, it will unfortunately have much less food in the world. This will end up happening,” Veloso said.
In 2021, Brazil imported 9.3 million tons of fertilizers from Russia, 24% more than the 7.5 million tons of the previous year, according to data from Secex (Secretariat of Foreign Trade).
According to him, there are other aspects that could worsen the already critical scenario, such as the risk of a strike on a Canadian railroad through which the country’s potassium flows. Canada has accounted for 32% of shipments to Brazil since 2017.
“[O Canadá] There is already a bottleneck in export logistics and there is one more aggravating factor. If you want to complicate this scenario further, if you need to, practically every year one of these conventional potash mines, for geological reasons, are very deep mines, at 1,500 m, 2,000 m deep, there is a very big problem with water infiltration. . Mine is often lost.”
Veloso praised the National Fertilizer Plan launched on Friday (11) by the federal government and said that the impact on Verde Agritech will be positive.
With a project approved by the Ministry of Mines and Energy that makes it possible to supply 33% of the current Brazilian demand for potash, the CEO said that the company, with 300 employees, has been working to make the expansions possible as quickly as possible and plans to reach this production within a horizon of five to ten years.
For this, however, he said that it depends on a connection with the rail network and preaches that state and municipal governments also have a priority to minimize the impacts of the crisis.
After having worked for two years with electric power generators, Veloso said that in the expansion of the factory, he should be forced to operate again with a generator.
Verde Agritech closed 2021 with around 400,000 tons produced and, with the expansion, it will have a production capacity of up to 3 million tons per year.
The operation in São Gotardo does not require a dam and the potassium is chlorine-free, unlike imported potassium chloride. The source of production is glauconitic siltstone, a greenish rock.
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