By: Editorial Team, StoneX Media
Urea and ammonium sulfate prices have turned higher at Brazilian ports, and the latest attacks in the Middle East are part of why. Middle East fertilizer prices matter to Brazil because the country buys almost all of its nutrients abroad, so a supply shock thousands of miles away lands in a Brazilian crop budget within weeks. Since April, nitrogen prices in Brazil had been falling, with the previous rally fading and values returning to pre-war levels. That pattern has now reversed, and it has reversed at the point in the calendar when Brazilian buyers still have restocking left to do.
Tomas Pernias is a Senior Market Intelligence Analyst at StoneX in Brazil, where he tracks fertilizer trade flows and pricing dynamics for commercial agricultural clients across South America. His coverage centers on how geopolitical disruption and shifting trade routes move the cost of imported nutrients into Brazilian grain and oilseed production.
"In recent weeks, urea and ammonium sulfate prices have started to rise again at Brazilian ports" [00:18], Pernias says, and the move is not being driven by conflict alone. He points to three forces working together, describing the rally as supported by "stronger demand, better barter ratios with corn and the latest attacks in the Middle East". Better barter ratios matter because they set how much corn a Brazilian producer must sell to cover a ton of nutrient, and improved ratios pull buyers back into the market. Consequently, Brazilian purchases are picking up into a rising market rather than a falling one, which is the reverse of the position buyers held earlier in the year. The upward trend is not one-way risk, however, since a resumption of Chinese exports would add more supply than the market currently expects and could take the strength out of it.
Phosphate prices in Brazil are falling, but sulfur is stopping that decline from reaching its usual depth. The seasonal slowdown around soybean planting normally hands Brazilian buyers a discount, and high prices and unattractive barter ratios had already thinned demand in that nutrient. What is different this year is the cost of sulfur, a market where imports are lagging behind last year's levels and prices remain elevated. According to Pernias, "as long as the war in the Middle East continues, Brazilian buyers are unlikely to secure major discounts in the short term". Rumors that exports from Russia and Kazakhstan could resume point to one route out, and sulfur prices at Brazilian ports have already dropped sharply in the space of a single week, yet that move has not been enough to change the broader picture for Brazilian agribusiness.
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Tomas Pernias, StoneX Brazil, Senior Market Intelligence Analyst
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