There is something to celebrate, but the road is still long

The regrettable conflict between Russia and Ukraine, which has been going on since the end of February and has already killed thousands of soldiers and civilians, has placed on the front pages of newspapers and brought to the center of market discussions a problem that has been affecting Brazil for years: dependence by imported fertilizers. Today we buy more than 85% of the inputs used in the country on the international market, coming from countries such as Morocco, Canada, China and, before the war, Russia.

But how is Brazil, one of the largest agricultural producers on the planet, still not self-sufficient in fertilizer production? We have a very strong mineral vocation, but the sector still demands investment in mineral research and this takes time.

In 2020, around US$1,2 trillion were invested in the development of mining projects around the world, of which only 14% were for exploration, according to the 2021 Global Mining Investment Outlook by E&MJ (Engineering and Mining Journal) . The USA and Canada invest an average of US$3.800 per km² in research, followed by Europe with US$1.800 and Africa with US$900. Meanwhile, in Latin America we spend just US$526 per km² on research.

The Fraser Institute publishes an index of attractiveness for investment in countries and Brazil received a score of 56,2 out of 100. The index considers geological attractiveness, level of sector regulation, taxation, quality of infrastructure, as well as uncertainties related to legal uncertainty, instability politics, etc.

We, as a sector and citizens, need to demand from our governments public policies that encourage mining investment in Brazil. Recently, the National Fertilizer Plan was approved, which is a sign that there is a growing effort on the part of the Federal Government to implement policies and strategies that will allow us to increase the number of fertilizer production projects and strengthen initiatives that are already under construction or active. The joining of forces between public authorities and input producers will allow us to move towards the goal of reducing national dependence on imported fertilizers by 2050, as foreseen in the Plan.

It is true that there is still a long journey to be covered and I believe that Brazil will not achieve self-sufficiency in the next decade, but the first steps have been taken and we will move forward, with the expectation of increasingly more government and market support, which is already beginning to see the advantages of investing in the production of national inputs.

By Fernando Tallarico, CEO of Aguia Fertilizers