In the crosshairs of the United States and European countries since the disputed re-election of dictator Aleksandr Lukachenko, in August of last year, Belarus has been looking to Brazil for an ally, using potassium chloride as its trump card.
In 2020, the former Soviet republic accounted for 20.9% of Brazil’s fertilizer imports, trailing only Russia and Canada as a supplier. 2.44 million tons were purchased from the eastern European country, an increase of 39.4% compared to 2019.
Potassium chloride is one of the fertilizers most used by farmers, very common for crops such as soybeans and corn. Brazil has few mapped deposits of the product and imports 95% of what it consumes. Belarus is the second largest producer of the input in the world.
Belarus’ exports, including potash, have been sanctioned as part of Lukachenko’s 26-year victory in power, which showed widespread signs of fraud. In addition, his regime has harshly cracked down on opposition demonstrations and is accused of provoking a crisis with the European Union, forcing immigrants from the Middle East to congest the country’s borders with Poland and Lithuania.
The risk that sanctions will increase the price of the product or lead to interruption of supply chains has been explored by the Belarusian authorities.
In a recent interview with sheet, the country’s new ambassador to BrasÃlia, Serguei Lukashevich, highlighted that inputs have been important for the growth of Brazilian agricultural production for many years.
“The main ‘victim’ of EU and US sanctions in the potash fertilizer trade sphere will not be Belarus itself, but world food security, as well as Brazilian agriculture,” he said.
According to some forecasts, there may be a shortage of the product as of April 2022.
This pessimistic view has support in the Brazilian government, starting with President Jair Bolsonaro himself. On a trip to Dubai on November 13, he expressed concern about the possible lack of input.
“We have problems ahead, the issue of Belarus. Up ahead, we are asking God that the problem does not increase, with regard to the issue of fertilizers. This has to do with our agriculture,” he said.
In an interview with the newspaper O Estado de S. Paulo on the same trip, the minister of Agriculture, Tereza Cristina, was more explicit. He said that the interruption in the supply of the product coming from Belarus could impact the price of food in the crop to be planted next year. She stated that the government is already mobilizing to try to compensate for possible losses with other suppliers.
So far, Itamaraty’s response to the situation in the European country has been succinct, in contrast to the forceful positions of other nations. It came in a two-sentence note issued on August 20 of last year, 11 days after the election.
At the time, the government said it was following “with concern” reports of violence against peaceful protests. “Brazil calls on the country’s political forces to broad dialogue and the peaceful solution of differences, with full respect for fundamental rights and the principle of popular sovereignty.”
For Volha Franco, from the Belarus People’s Embassy in Brazil, which brings together the country’s small diaspora in Brazilian territory, bilateral relations are guided by a mantra: economic interests in the first place. “Brazil, at the very least, should take a firmer stance against the repression. The regime has not yet fallen because it has money. The funds obtained from the sale of potash are used to equip the police, which repress workers and protesters,” he says Is it over there.
Belarusian potassium chloride is exploited by the Belaruskali company, which has close links with the Lukachenko regime. Exports are carried out by the Belarusian Potassium Company, which claims to sell the product to over one hundred countries. The company attaches great importance to Brazil, so much so that it maintains in Curitiba (PR) one of its only representative offices around the world. It also has a Portuguese version of its website. The company was contacted by sheet, but did not manifest.
The possible shortage of Belarusian potassium is being watched with concern by agricultural producers.
“So far, sanctions have not prevented exports. They made logistics difficult, as it was necessary to relocate the flow of ports from Lithuania to Russia. The concern is that the geopolitical issue will get worse,” says Reginaldo Minaré, deputy technical director at the National Confederation of Agriculture.
Minaré says that uncertainty about Belarus’ input is added to an unfavorable situation that puts pressure on food prices, involving logistical issues and rising fuel prices. According to him, next year’s crop will certainly be the most expensive of the century.
“Belarus represents 18% of global potassium production. It is an expressive amount and is not easily replenished”, he says. The price per ton of the product has already been rising on the international market.
For Felippe Serigati, a researcher at FGV Agro, the very characteristics of the international potash market amplify any supply shock. “The market is inelastic, the space to compensate for the variation in product quantities is limited. Small changes have a very large price shock.”
According to him, the planting of the 2022 crop in Brazil has already taken place and will not be affected, but the situation is much more worrying in relation to the so-called “safrinha” of corn, which begins to be sown in March.
“If the price of fertilizer is too high, the farmer will not use it, with an impact on production.”
The upward trend is inevitable if Belarus remains unable to export its production. “In a geopolitical environment like this, the producer is not sure if he will ship the product. And, if he does, he does not know if the ship will be able to leave. The freight price is high, it makes no sense to expose himself to this risk,” he says Serigati.
In a note sent to the reporter, Itamaraty said that it has received reports from agricultural producers concerned about the obstacles in the supply of fertilizers. The ministry stated that it has been trying to identify potential alternative export markets for Brazil.
“Companies have already been found in more than 20 countries with availability of the product, which seems to show that, despite the pressure observed on the prices of the input, there would be no imminent risks of shortages in the international market.”
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