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Soybean fertilization accounts for more than 40% of Brazil's fertilizer consumption, and with planting advancing, the country's main phosphate and potash import window is closing. Middle East fertilizer supply risk is not landing evenly, since nitrogen is the most exposed through urea and ammonia flows via the Strait of Hormuz, phosphate depends on progress in U.S. and Iran talks, and potash sits furthest from the conflict. That split matters for Brazilian importers, because the usual seasonal easing in prices no longer applies across the board. Each nutrient is now trading on its own supply story.
Tomas Pernias, StoneX Brazil, Senior Market Intelligence Analyst, tracks fertilizer trade flows and pricing dynamics for commercial agricultural clients across South America from Campinas. His coverage centers on how geopolitical disruptions and shifting trade routes affect Brazilian agriculture and commodity imports, alongside grain and oilseed markets.
Nitrogen is the fertilizer segment most directly tied to Middle East escalation, because urea and ammonia cargoes move through the Strait of Hormuz. The fourth quarter is also seasonally strong for Brazilian nitrogen imports, as buyers restock ammonium sulfate and nitrate ahead of the safrinha corn crop. "If the tensions in the Middle East escalate, we could see more disruptions to urea and ammonia flows through the Strait of Hormuz, and that would likely push natural gas prices up as well," Pernias says. As a result, a Middle East shock would hit nitrogen twice, first through physical cargo flows and then through higher production costs.
Phosphate supply from the Middle East remains reduced, and that keeps a floor under the market even as Brazilian demand cools. According to Pernias, "If talks between the USA and Iran don't move forward, a reduced Middle Eastern supply will persist." China is also keeping a tight grip on phosphate exports, and without a real drop in sulfur costs, producers lack the margin to ramp up output. In contrast to the usual seasonal script, phosphate prices face what Pernias calls "a soft correction at best, but not a steep drop", which limits relief for Brazilian buyers.
Potash is the fertilizer segment least exposed to a worsening of the Middle East conflict, with comfortable inventories and the most favorable trade ratios among the major nutrients. That gives corn and soybean producers reason to keep using potash to cover future needs. Notably, the main risk to potash supply comes from Russia rather than the Middle East, as drone attacks have caused logistical problems for Russian potash exports and rumors point to a production cut of as much as 25% of the country's output. Pernias notes that the outcome is still open, "We don't know yet if that will happen, but it's become a real concern for buyers and traders in the global market."
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--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Tomas Pernias, StoneX Brazil, Senior Market Intelligence Analyst
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