War between Russia and Ukraine leaves agriculture in Paraná on alert

The world has been following with anxiety the constant updates coming from the conflict between Russia and Ukraine, which officially began on February 24, when Vladimir Putin's troops entered Ukrainian territory. Since then, in addition to the human losses with thousands of deaths and injuries and a legion of refugees, the crisis has triggered economic repercussions around the planet. And even more than 11 thousand kilometers away from Ukrainian territory, Paraná is also beginning to feel economic impacts.

The FAEP/SENAR-PR System prepared a data survey to help understand the possible consequences of the war on state agribusiness. Firstly, in exports, where products such as meat, coffee and the sugar and alcohol complex are the most affected. Regarding imports, the biggest concern concerns fertilizers from Russia, the country responsible, in 2021, for supplying 20% ​​of the fertilizer purchased by rural producers in Paraná.

“To Ukraine, we mainly export sugar and coffee. The values ​​reach US$27 million, which places the country in 58th position in the ranking of main trading partners. In the case of Russia, the conversation changes direction. The country is 16th in general terms of agricultural exports, but is in 8th position in the ranking of the largest buyers of livestock in Paraná”, points out Luiz Eliezer Ferreira, technician from the Technical and Economic Department (DTE) of the FAEP/SENAR-PR System.

On the import side, Paraná suffers from its dependence on Russia to purchase fertilizers. “We live in a globalized society in which there is enormous interdependence between countries. And that's not a bad thing, after all, no one can be self-sufficient. This promotes the circulation of goods and financial resources. The other side of the coin is that, in cases like this, the consequences are inevitable and will have an impact on agriculture in Paraná”, analyzes Ferreira.

The technician from the FAEP/SENAR-PR System points out that, even though Brazil does not impose embargoes on Russia and Ukraine, a war like the one currently underway creates challenges for the circulation of goods and even financial resources. “The embargoes imposed by the European Union and the United States on Russians make it difficult to transfer money to Russia. Under normal conditions, sending and receiving money is often done via European banks,” he explains.

There is also the aspect of moving the loads themselves. With an ongoing armed conflict, ships are vulnerable and can be targets of military attacks and/or pirates who take advantage of the situation to loot cargo. “Ships are not being able to access the sea surrounding Russia, mainly the Black Sea, due to international insurance companies, which are not insuring cargo due to a war clause. There is also the security aspect due to the risk of the conflict itself”, he lists.

Fertilizer crisis

It is not new that fertilizers have been a thorn in the side of rural producers. Since last year, the fundamental input for agricultural production has been going through a “perfect storm”. The pandemic and logistical, political, climate and energy problems influence a combination that works against those who need to buy the NPK compound (nitrogen, phosphorus and potassium). To get an idea of ​​the variation in these inputs, in September 2020, the cost of fertilizers in a soybean crop in the Londrina region was R$620 per hectare. In the same month this year, this cost more than doubled, rising to R$1.323.

Each chemical element in the formula has experienced a specific problem in recent months. The price of potash was pressured by a diplomatic crisis between the European Union and the Belarusian dictatorship (responsible for 20% of the world's supply of the product). Nitrogenous products went to another price level due to increases in the costs of generating electricity in China (the largest supplier of this input).