Protecting the harvest

Latin America faces a fertiliser shortage; crop production will suffer.

Russia is the leading exporter of fertiliser to Latin America. The agricultural sectors of countries across the region are critically dependent on the product to cultivate crops. One of the more pernicious economic effects of sanctions against Moscow has been to a) negatively affect fertiliser exports and b) significantly drive up prices.

An Argentina-based agricultural engineer and consultant to several companies in the agri-food sector said, “Russia is the major exporter of fertiliser to Latin America. In Argentina, the agricultural sector could lose USD 4 billion this year if crops cannot be properly harvested because of a fertiliser deficit. On the other hand, this could be an opportunity for the country to start producing its own fertiliser on a larger scale. There are significant potassium deposits – a key component for the manufacture of fertiliser – in Mendoza province. Effective exploitation of these resources could propel Argentina into the top echelon of potassium exporters in the world.”

“In Argentina, the agricultural sector could lose USD 4 billion this year if crops cannot be properly harvested because of a fertiliser deficit.”

Agricultural engineer, Argentina

Brazil, which accounts for over 20% of Russian fertiliser exports, is now looking to Canada and the US to help plug the fertiliser gap – crucial not only for domestic consumption but for exports, Brazil’s agricultural industry exports food products to around one billion people globally.

A Brazilian expert on food security and university professor explained, “Brazil’s strengths in agricultural production are accompanied by high vulnerability. Without fertiliser, the industry virtually grinds to a halt – productivity will see a drastic drop. Even before the Ukraine crisis started to affect imports, MERCOSUR had warned that a lack of fertiliser from China had been exacerbated by drought and high oil prices. No backup plan was meaningfully talked about.”

“Even before the Ukraine crisis started to affect imports, MERCOSUR had warned that a lack of fertiliser from China had been exacerbated by drought and high oil prices.”

Food security expert, Brazil

Brazil, after India, is the second largest importer of several types of fertilizers in the world and it is not uncommon for it to be the principal buyer of Russian production in Latin America. Mexico, for its part, is the main importer of fertilisers from Ukraine whilst in Argentina fertiliser imports represent a quarter of Brazil’s total purchases.

It is not only public finances that will suffer from lower exports, but also regional food sovereignty and security. In most cases, not because they depend on food purchases, but because of the shortage of fertilisers that affects national production – and in countries including Peru and Ecuador, a substantial fiscal revenue stream.

The Brazilian food security expert explained, “On the economic front, the key challenge related to fertilisers is linked to inflation. Fertiliser products and derivatives have already risen in price in the last 12 months, almost doubling. Argentina already produces smaller quantities of fertiliser which are critical to its soybean industry but is not currently able to increase fertiliser production to export to the region without massive agricultural infrastructure investment. If Canada and the US are unable to help plug the fertiliser gap, Latin America’s agricultural sector is in for a bumpy ride.

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