By Gabriel Araujo and Kylie Madry
SAO PAULO, March 18 (Reuters) - Brazil may encounter fertilizer supply issues if the ongoing conflict in the Middle East does not subside soon, the nation's agriculture minister warned on Tuesday. He criticized sellers for sharp increases in local urea prices, while analysts noted that farmers might shift to more affordable alternatives.
Agriculture Minister Carlos Favaro stated that the U.S.-Israeli conflict with Iran has already caused urea prices in Brazil to rise within days. Some sellers have even halted sales despite holding inventories prior to the conflict.
Market pressures have intensified since late February following joint U.S.-Israeli attacks on Iran, with shipping disruptions around the Strait of Hormuz unsettling the energy and fertilizer sectors. According to some estimates, about one-third of the global seaborne fertilizer trade passes through this crucial waterway.
Favaro cautioned that a prolonged conflict could pose broader risks to Brazil's agricultural sector, which imported a record 45.5 million metric tons of fertilizers in 2025.
"It is a concern, naturally. There is a sense that there is a certain opportunism in the market, as stocks already present in Brazil have been repriced. That makes no sense," Favaro said.
Brokerage StoneX reported that urea prices delivered to Brazil surged approximately 35% over two weeks, making the product less attractive to buyers and potentially driving importers and farmers toward cheaper options such as ammonium sulfate.
StoneX cited data showing Brazil's urea imports in the first two months of the year fell 33% compared to a year earlier, while ammonium sulfate imports increased by 19%.
Urea is one of the most widely used nitrogen fertilizers on Brazilian farms due to its high nutrient concentration, which typically justifies its cost. However, when prices rise sharply, buyers may switch to less expensive, lower-concentration products.
Lower prices for Brazil's agricultural exports have further complicated the difficult decisions now facing farmers, StoneX analyst Tomas Pernias noted in the report.
(Reporting by Gabriel Araujo and Kylie Madry; Editing by Brad Haynes and Aurora Ellis)
