With the rise in natural gas, Europe suspends part of fertilizer production

According to data released by Fertilizers Europe, an entity that represents the majority of fertilizer producers on the European continent, around 70% of the input's production capacity was suspended due to the increase in natural gas. The adjustments especially impact the nitrogen fertilizer industries, since natural gas is used by the sector as a raw material and energy source. The spike in prices is a reflection of the sanctions imposed on Russia due to conflicts with Ukraine – around 40% of European demand was supplied by the Russians.

For Fernando Tallarico, CEO of Aguia Fertilizers, the crisis goes beyond the European continent and could represent a global food risk. With less supply of fertilizers, prices tend to rise, which directly impacts the value and availability of food.

“If there are no investments in fertilizer production, we only have two alternatives. Either the producer accepts the market price and readjusts the value of the food or reduces the use of the input, which directly affects productivity. Currently, Europe is better able to face this readjustment, but what about less developed countries? The impact can be brutal”, ponders Tallarico.

National production is the best alternative

From January to May this year, Brazil imported more than 14 million tons of intermediate fertilizers, while national production was just 3,2 million tons – which represents less than 20% of the country's demand, according to data released by National Association for Fertilizer Diffusion (ANDA) in August this year.

“It is urgent and necessary to look even more carefully at the national fertilizer production sector. Policies and investments are needed to develop and expand this market. We have fertile soil and conditions that are more than suitable for this. We cannot be one of the largest agricultural producers in the world and the largest importer of fertilizers. These are issues that are interconnected and the development of Brazilian agribusiness depends directly on investments in national fertilizers”, argues the Aguia executive.