Latest news with #Aprosoja
Yahoo
21-07-2025
- Business
- Yahoo
Analysis-US sanctions could cause chaos on Latam farms run on Russian fertilizers
By Ana Mano and Cassandra Garrison SAO PAULO/MEXICO CITY (Reuters) -Latin American farmers are in for a rough ride if the U.S. slaps secondary sanctions on buyers of Russian exports, such as the fertilizers essential for cash crops from Mexican avocados to Brazilian soybeans and corn. For farm powerhouse Brazil, which covered about a third of its fertilizer demand with $3.7 billion of imports from Russia last year, there is virtually no alternative to fill the gap if those flows are halted, experts and industry players said. The 2022 outbreak of war in Ukraine triggered stockpiling of Russian fertilizer in the region. Prices soared briefly, but trade has now normalized. Plans to boost domestic fertilizer production in Mexico and Brazil have made slow progress in the face of relatively cheap Russian imports. Shipments to Brazil, the world's largest producer of soybeans, sugar and coffee, rose nearly 30% in the first half of this year, the Russian Fertilizer Producers Association said. NATO Secretary General Mark Rutte singled out Brazil among a handful of countries that could be hit "very hard" by sanctions for doing business with Russia as part of U.S. President Donald Trump's renewed push to end the war in Ukraine. Fresh sanctions targeting Russian fertilizer imports could "render soybean and corn production inviable," said Lucas Beber, vice president of Brazilian grain farming group Aprosoja. Mexico also imported more than $580 million of fertilizers last year from Russia, its largest supplier according to government data. Potential U.S. sanctions would pose a big problem for farmers there. "It would affect Mexico's purchases from Russia of different fertilizers, particularly urea, which is the most widely used in crops such as corn, sorghum, wheat, and even avocado," said Raul Urteaga. A former director of international affairs for Mexico's agriculture ministry, Urteaga warned of a drop-off in the quality of fertilizers available if Russian imports disappear. That could weaken avocado production and send prices higher for U.S. consumers. The U.S. accounts for more than 80% of Mexico's total avocado exports, a market worth more than $3 billion last year, according to U.S. government data. "The price of avocados would increase if producers have to use other alternatives or find fertilizers that are imported from sources other than Russia," Urteaga said. Russia is also top fertilizer supplier for Colombia, another key producer of fruits, flowers and coffee to the U.S. Russia provides about a quarter of Colombia's fertilizer imports, government data shows. The World Bank has identified fertilizer costs as a driver of food inflation in Central America, contributing to a cost-of-living crisis that has stoked northward migration. SALES DELAYED Even fertilizer companies that have already cut ties with Russian suppliers, like U.S.-based Mosaic , expressed fears that further trade disruptions with one of the world's top three fertilizer producers could feed volatility. "Potential discussions involving retaliation against countries that operate with Russia ... only end up further aggravating the situation in terms of pricing," said Eduardo Monteiro, Mosaic's country manager in Brazil, which contributes 40% of the company's global revenue. He said geopolitical tensions delayed sales to Brazilian farmers for the next crop cycle, which could compromise timely fertilizer deliveries for major crops such as soybeans, which farmers plant from September. Big privately held fertilizer makers Eurochem and Fertipar, which supply their Brazilian processing plants with imports from Russia according to trade data, declined or did not reply to questions about potential sanctions. Brazil has touted plans to nearly halve its reliance on foreign fertilizers. Mexico aims to boost domestic production from 33% to 80% of local demand. Brazilian President Luiz Inacio Lula da Silva and Mexico's Claudia Sheinbaum have both prodded state oil companies Petrobras and Pemex to ramp up fertilizer production. They have made slow progress, however. In Brazil's case, efforts were hampered by factors including lack of funding, potentially costly mineral resources and expensive natural gas, which is key to producing nitrogen fertilizers. The problem could be partly mitigated after Brazil Potash Corp starts to mine for potash in the Brazilian Amazon, which should happen once the infrastructure and permitting are in place. In Mexico, debt-laden Pemex has struggled over the years to make fertilizers a profitable business. Unfazed by local competition, U.S. sanctions or European bans, Russian fertilizer producers say they expect to raise their global market share to 25% by 2030, relying largely on sales to developing BRICS nations including Brazil, India and China. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
21-07-2025
- Business
- Reuters
US sanctions could cause chaos on Latam farms run on Russian fertilizers
SAO PAULO/MEXICO CITY, July 21 (Reuters) - Latin American farmers are in for a rough ride if the U.S. slaps secondary sanctions on buyers of Russian exports, such as the fertilizers essential for cash crops from Mexican avocados to Brazilian soybeans and corn. For farm powerhouse Brazil, which covered about a third of its fertilizer demand with $3.7 billion of imports from Russia last year, there is virtually no alternative to fill the gap if those flows are halted, experts and industry players said. The 2022 outbreak of war in Ukraine triggered stockpiling of Russian fertilizer in the region. Prices soared briefly, but trade has now normalized. Plans to boost domestic fertilizer production in Mexico and Brazil have made slow progress in the face of relatively cheap Russian imports. Shipments to Brazil, the world's largest producer of soybeans, sugar and coffee, rose nearly 30% in the first half of this year, the Russian Fertilizer Producers Association said. NATO Secretary General Mark Rutte singled out Brazil among a handful of countries that could be hit "very hard" by sanctions for doing business with Russia as part of U.S. President Donald Trump's renewed push to end the war in Ukraine. Fresh sanctions targeting Russian fertilizer imports could "render soybean and corn production inviable," said Lucas Beber, vice president of Brazilian grain farming group Aprosoja. Mexico also imported more than $580 million of fertilizers last year from Russia, its largest supplier according to government data. Potential U.S. sanctions would pose a big problem for farmers there. "It would affect Mexico's purchases from Russia of different fertilizers, particularly urea, which is the most widely used in crops such as corn, sorghum, wheat, and even avocado," said Raul Urteaga. A former director of international affairs for Mexico's agriculture ministry, Urteaga warned of a drop-off in the quality of fertilizers available if Russian imports disappear. That could weaken avocado production and send prices higher for U.S. consumers. The U.S. accounts for more than 80% of Mexico's total avocado exports, a market worth more than $3 billion last year, according to U.S. government data. "The price of avocados would increase if producers have to use other alternatives or find fertilizers that are imported from sources other than Russia," Urteaga said. Russia is also top fertilizer supplier for Colombia, another key producer of fruits, flowers and coffee to the U.S. Russia provides about a quarter of Colombia's fertilizer imports, government data shows. The World Bank has identified fertilizer costs as a driver of food inflation in Central America, contributing to a cost-of-living crisis that has stoked northward migration. Even fertilizer companies that have already cut ties with Russian suppliers, like U.S.-based Mosaic (MOS.N), opens new tab, expressed fears that further trade disruptions with one of the world's top three fertilizer producers could feed volatility. "Potential discussions involving retaliation against countries that operate with Russia ... only end up further aggravating the situation in terms of pricing," said Eduardo Monteiro, Mosaic's country manager in Brazil, which contributes 40% of the company's global revenue. He said geopolitical tensions delayed sales to Brazilian farmers for the next crop cycle, which could compromise timely fertilizer deliveries for major crops such as soybeans, which farmers plant from September. Big privately held fertilizer makers Eurochem and Fertipar, which supply their Brazilian processing plants with imports from Russia according to trade data, declined or did not reply to questions about potential sanctions. Brazil has touted plans to nearly halve its reliance on foreign fertilizers. Mexico aims to boost domestic production from 33% to 80% of local demand. Brazilian President Luiz Inacio Lula da Silva and Mexico's Claudia Sheinbaum have both prodded state oil companies Petrobras and Pemex to ramp up fertilizer production. They have made slow progress, however. In Brazil's case, efforts were hampered by factors including lack of funding, potentially costly mineral resources and expensive natural gas, which is key to producing nitrogen fertilizers. The problem could be partly mitigated after Brazil Potash Corp (GRO.A), opens new tab starts to mine for potash in the Brazilian Amazon, which should happen once the infrastructure and permitting are in place. In Mexico, debt-laden Pemex has struggled over the years to make fertilizers a profitable business. Unfazed by local competition, U.S. sanctions or European bans, Russian fertilizer producers say they expect to raise their global market share to 25% by 2030, relying largely on sales to developing BRICS nations including Brazil, India and China.
BBC News
25-04-2025
- Business
- BBC News
Could South America benefit from Trump's trade tariffs?
When Donald Trump revealed the level of trade tariffs that countries around the world would face from the US, nations in South America breathed a sigh of of the 12 states on the continent received the lowest level of 10%.Only Guyana and Venezuela were initially hit with higher rates of 38% and 15% respectively, before these were subsequently reduced to 10%. This came as Trump decided to pause elevated rates on almost all countries for 90 exceptions are China, which has been hit with 145%, and Canada and Mexico, which have still got 25% tariffs on some exports to the who describe this as a win for South America argue that the higher US tariffs on China, and on Canada and Mexico, could make South American goods more attractive to US and global plausible, this view oversimplifies broader global trade instability that South America is also exposed to. Here I'll set out this debate – starting with the potential upsides for the America is rich in commodities. Its biggest economies - Brazil and Argentina - are major exporters of soybeans and petroleum as well as, in Brazil's case, iron ore used in steel US's huge tariffs on Chinese goods, and China's retaliatory 125% on US imports, may create opportunities for South American example, Brazil could increase agricultural exports to China to replace previous US supplies. China is already Brazil's largest export destination, followed by the is a precedent. When Trump hit China with tariffs during his first term of office, China shifted some commodity purchases from the US to Brazil, boosting Brazilian soybean the 2025 soybean harvest in Brazil now continuing, some are hoping for a include Frederico D'Avila, a farmer and ex-politician aligned with former Brazilian President Bolsonaro. Mr D'Avila was also previously a senior figure at Aprosoja, a soybean producers' tells the BBC that President Trump's first term was "excellent for Brazilian agriculture" as "Trump's tariffs in that time favoured us". However, Juan Carlos Hallak, professor of international economics at the University of Buenos Aires, has a counterpoint. He says that raising "bilateral barriers" on commodities mostly just affects "who sells to whom", and not financial gains for the sellers - as the prices are set his suggestion is that South American nations shouldn't expect more financial gains from their commodities as a result of Trump's actions, just potentially different customers."The prices are [instead] affected by macroeconomic factors… for example if there is a recession," he tells the other sectors in South America are also hoping that Trump's actions mean they could win more global sales as countries decide to buy less from the the Brazilian beef industry. The country's President Luiz Inácio Lula da Silva was recently in Japan, hoping to open the Japanese market to Brazil's beef currently buys 40% of its beef from the US. But after Trump initially threatened to hit the country with 24% tariffs, Tokyo may shift to buy more meat from South America. Other Brazilian industries, such as coffee and footwear, may gain a competitive edge over their Asian counterparts in the US is the world's biggest producer of coffee, followed by Vietnam, Indonesia and initially hit Vietnam with tariffs of 46% and Indonesia with 32%. While those higher rates are now on pause, if they are reinstated in July it will make beans from those two countries significantly more expensive in the would give both Brazilian and Colombian coffee a competitive advantage in the US, where they are already the main Brazil's shoemakers could see more exports to the US as a result of Trump's high tariffs on Chinese exports. Currently China is the world's largest manufacturer of footwear while Brazil is in fifth place. The other three nations in the top five list of the world's largest footwear producers are India, Vietnam and Indonesia. The US initially gave India a higher tariff rate of 26%.Uruguay's new President Yamandú Orsi has also said that Trump's tariffs are helping to push a trade deal between the EU and South America's bloc, Mercosur, closer to said that "Europe has little choice now but to lower its demands somewhat" in negotiations, as it seeks to diversify trading partners. You may have noted a lot of "coulds" and "ifs". That's not just because it is early days. It's also because the pace and scale of US trade changes are causing wider the potential positives for South America outweigh the potential negatives is hard to calculate accurately, which brings me to the risks for the 10% is still 10%. Even countries with the lower tariff rate may face reduced US demand if prices rise. This is more of a risk for imports that compete with US domestic production, such as oil, soybeans, copper, iron ore, gold, and US has also hit imports of aluminium and steel, from all countries, with tariffs of 25%.Brazil is a producer of both metals and has large reserves of their raw materials – bauxite and iron ore. Meanwhile, Argentina has one of the largest aluminium producers in South America, listed company Aluar, and a smaller steel producers warn they may both lose US access and face more Chinese imports, creating increased competition for domestic producers."We're worried by the diversion of what can no longer enter the US," Carlos Vaccaro, executive director of the Argentine Steel Chamber, told the Buenos Aires Herald. Trump's tariff wars have also led to global commodity price volatility, with oil and copper prices seeing slumps. Copper hit a 17-month low at the start of April. This volatility could hit the economies of Chile and Peru, where copper is the top Levy Yeyati, a former chief economist at the Central Bank of Argentina, says the impact on commodity prices and global demand is a "serious headwind" for South ahead, Mr Yeyati says that if Brazil and Argentina do end up enjoying a big rise in exports to the US, it could result in them getting higher tariffs from all, Trump's aim is to boost domestic production, not imports from other Yeyati says that Trump may be equally displeased if South American nations start exporting more to China. "If Brazil fills in the US quota of goods exports to China, the US may choose to punish Brazil."He theorises that Trump could also try to pressure Latin America to reduce China's footprint in the region in return for favourable treatment. China invests billions of dollars in infrastructure projects across Central and South America. So, calling Trump's tariffs a clear "win" or "loss" for South America oversimplifies a complex situation. Especially if Trump announces in July that every country except China, Canada and Mexico will continue at 10%.As Mr Hallak says: "It's very hard to predict where this is going."Subject to this caveat, he envisions a future where the US protects its manufacturing industries more than its agricultural adds: "I'm not sure Latin America is ready to take advantage of those opportunities. There will be specific opportunities for sure, but something that changes the game? I don't think so."
