“We are facing a scenario that combines geopolitical conflicts and high energy costs…”
Alessandro Riquetti, Vice President of Supply Chain at Yara Brasil, electrical engineer from UFSC, with specialization and a master’s degree from Mackenzie Presbyterian University.
Alessandro Riquetti, Vice President of Supply Chain at Yara Brasil
AgriBrasilis – How high can fertilizer prices go?
Alessandro Riquetti – We are facing a scenario that combines geopolitical conflicts and high energy costs, which indicates that price trends are still upward and the market has not yet reached the peak of this surge. The situation is worsened by the conflict in the Middle East, a strategic region for global nitrogen supply, which has driven fertilizer prices up sharply. Recently, urea reached US$ 943 per tonne in international tenders, in a context of China’s absence from the export market and damage to global gas infrastructure. This combination of factors creates a bottleneck that makes it difficult to predict any price ceiling or short-term stability.
At Yara, we do not purchase from sanctioned countries and rely on a global supplier network. In addition, we operate a daily crisis committee to mitigate these impacts and ensure supply to our partners, preventing high prices from turning into shortages. Our strategy focuses on high-tech products and contracts that provide legal and operational security, but it is essential to understand that fertilizer prices will remain under pressure as long as uncertainties persist in the Strait of Hormuz and global logistics challenges continue. This moment requires extreme caution and well-grounded investment decisions from farmers.
AgriBrasilis – What have been the effects of geopolitical instability on the sector? Has this scenario also created opportunities for companies?
Alessandro Riquetti – Geopolitical instability has had severe and immediate effects, especially on nitrogen and urea supply, as the Middle East accounts for about 34% of global production of these inputs. With the escalation of conflicts, we face direct pressure on production costs due to volatility in natural gas and oil prices, resulting in a surge of more than 50% in fertilizer prices. This significantly compromises the profitability of Brazilian farmers, who are currently dealing with the worst input–output ratio in the last 20 years, as grain prices have not kept pace with rising costs.
Additionally, physical damage to global infrastructure—such as attacks on pipelines and production units by drones and missiles—makes a return to normality even more complex and uncertain.
This critical scenario has forced the sector to mature and seek strategic solutions. At Yara, the crisis has reinforced a transition started in 2021 toward safer business models, prioritizing contracts that ensure supply and avoid unnecessary stockpiling. There is also a clear opportunity to accelerate the debate on national fertilizer sovereignty: Brazil, which currently imports 85% of its needs, is seeing the strengthening of gas infrastructure projects and the advancement of initiatives such as the National Fertilizer Plan as essential paths to reduce external dependence.
AgriBrasilis – How have restricted credit, tight margins, and indebtedness affected the market?
Alessandro Riquetti – Restricted credit and high interest rates in the country—currently around 15% per year (with real rates reaching up to 24%)—have created a financial bottleneck that makes the equation unviable for many farmers. This indebtedness scenario, combined with extremely tight margins, has led to a concerning increase in judicial recovery filings and defaults across the entire chain.
The immediate effect is a more conservative market: banks have reduced lending, and distributors have limited direct credit operations, making access to inputs more difficult for those without their own capital.
This financial pressure forces farmers into a “perfect storm”: they need to invest in fertilizers, which have risen more than 50%, but lack liquidity because grain prices have not followed cost increases. As a result, we are seeing a contraction in market demand, which may decline between 5% and 10% this year. Farmers are being forced to become much more selective and efficient, prioritizing cash survival over productivity expansion.
AgriBrasilis – Low-carbon fertilizers are a premium market. Are farmers more concerned with sustainability or input–output ratios?
Alessandro Riquetti – Although low-carbon fertilizers represent the future and Yara’s commitment to feeding the world responsibly while protecting the planet, we cannot ignore the immediate reality in the field: Brazilian farmers are currently facing an unprecedented profitability crisis.
At this moment, the main concern is clearly the input–output ratio and maintaining margins, which are under pressure due to the worst cost equation in the past 20 years. Restricted access to credit and high interest rates make investment decisions a matter of financial survival, temporarily outweighing the environmental agenda.
We see sustainability and economic viability as pillars that must converge. Low-carbon fertilizers are a strategic response to ensure the long-term competitiveness of Brazilian agriculture, especially in light of increasing export requirements and global environmental barriers. At Yara, we are investing to make this technology—such as our renewable ammonia production in Brazil—a reference for regenerative agriculture that also generates financial value for farmers through greater efficiency and new markets.
Our goal is clear: to quadruple the volume of our lower carbon footprint portfolio by 2026, while recognizing that the pace of adoption depends on the sector’s economic stabilization.
AgriBrasilis – Many farmers have been seeking lower-cost alternatives. What are the consequences?
Alessandro Riquetti – This movement is understandable, but it can have serious consequences that compromise productivity. In agriculture, there is no “magic product.” The use of low-tech or scientifically unproven inputs often results in lower yields, offsetting any initial savings on fertilizer costs.
By opting for less efficient solutions, farmers risk reducing the supply of essential nutrients when crops need them most, leading to lower volume and quality harvests.
There is also a significant logistical and trust risk. In times of scarcity and geopolitical uncertainty, the market becomes more susceptible to offers that may not be delivered or lack proper technical standards. If the product does not arrive in time for planting or has questionable composition, the loss is doubled: the farmer pays for something ineffective and misses the optimal planting window.
AgriBrasilis – What about those who have not yet purchased fertilizers for the next crop?
Alessandro Riquetti – For those who have not yet secured inputs, the situation is critical and requires urgency. With an import cycle of around 90 days from shipment to farm delivery, we are already at the deadline limit for the summer crop.
Brazil’s import capacity is operating under constraints, and we are already seeing a drop of more than 10% in fertilizer volumes arriving in the country due to global logistics bottlenecks and ship congestion in the Middle East.
The risk of shortages is real for those who delay purchases and the priority now must be to secure product availability with reliable partners.
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