Overview
Brazil’s farm sector is confronting immediate market stress as urea prices escalated sharply following renewed conflict in the Middle East, the country’s agriculture minister said. The minister criticised a rapid repricing of stocks already in Brazil and warned that a protracted conflict could increase risks for the agricultural industry, which remains highly dependent on imported fertilizers.
What officials say
"It is a concern, naturally. There is a sense that there is a certain opportunism in the market, after all, stocks already present in Brazil have been repriced. That makes no sense," Agriculture Minister Carlos Favaro said.
Favaro attributed the near-term price moves to fallout from the U.S.-Israeli war on Iran, saying local urea prices rose within days of the conflict. He also accused some sellers of halting sales even though they had inventories in the country prior to the outbreak of hostilities.
Market drivers and trade routes
Market participants have grown more uneasy since late February, when joint U.S.-Israeli attacks on Iran coincided with shipping disruption around the Strait of Hormuz. The waterway carries a substantial share of seaborne fertilizer trade - by some estimates roughly one-third - and interruptions there have reverberated through energy and fertilizer markets.
Price moves and substitution
Brokerage StoneX reported that urea prices delivered to Brazil climbed about 35% over a two-week span. That rapid rise reduces urea's appeal to buyers and can encourage importers and farmers to substitute toward cheaper nitrogen sources, notably ammonium sulfate, which carries a lower nutrient concentration but also a lower price.
StoneX cited trade data showing Brazil’s urea imports for the first two months of the year fell 33% compared with the same period a year earlier, while ammonium sulfate imports increased 19%.
Industry implications
Urea is widely used on Brazilian farms because of its high nutrient concentration, which typically justifies a higher cost. When urea becomes markedly more expensive, buyers face a decision between absorbing higher input costs or switching to lower-cost, lower-concentration alternatives. StoneX analyst Tomas Pernias noted that weaker prices for Brazil’s agricultural exports have compounded the difficult choices for farmers weighing fertilizer options.
Context and outlook
Favaro cautioned that if the conflict does not ease soon, the disruptions and opportunistic pricing behavior could produce broader risks for a sector that imported a record 45.5 million metric tons of fertilizers in 2025. The minister’s comments underscore the sensitivity of Brazil’s farm economics to global supply chains and short-term price volatility in key agricultural inputs.
Reporting and analysis reflect statements from Brazil’s agriculture ministry, StoneX brokerage and cited trade data on fertilizer imports.