Russian invasion of Ukraine opens fertilizer competition in Venezuela

Thousands of bundles of manure are loaded into barns, including tractors and machinery, ready for sowing, but they are not enough. The war, 10,000 km away, will have repercussions on Portugal, considered Venezuela’s “barn.”

This is not an isolated case: the Russian invasion of Ukraine, the supplier of fertilizers to Latin America, opens a race across the region.

“10 26 26”, reads on sacks of Russian fertilizer used by manufacturers in Durren, Portugal. Those figures reflect the chemical composition of the tiny white spheres that fill those sacs: 10% nitrogen, 26% phosphorus and 26% potassium.

It rains at the beginning of the rainy season, and it’s time to prepare the soil for the cultivation of corn, which is essential in the diet of the Venezuelan people.

Russia is the world’s largest fertilizer exporter, with sales of $ 7.6 billion a year by 2020, according to the Competitive Economic Monitor (OEC), which is practically paralyzed by war and international sanctions.

Its production accounts for 12.1% of global distribution.

Lack

According to the Federal Federation of Agricultural Producers, 80% of the 180,000 metric tons of fertilizer needed annually in Venezuela is mainly imported from Russia, but also from Ukraine and Belarus.

“Thank God we were able to buy fertilizer in trade rounds from Russia in October and November. We paid in December and they were able to come in February and March,” he told the newspaper. AFP Celso Fontinal, President of FedEcro.

However, Fantinel warns of a shortfall equivalent to one-third of demand. No time to hide it: the weather is not waiting.

Ramon Bolotin, president of the Producers’ Association, laments that “after 30% of our capacity, we produce 30% of our capacity, but 30% do not have complete fertilizer,” after the economic downturn of recent years. Turén Independent Farmers.

He adds that soil production “requires chemical fertilizers”, adding that in a country of 30 million people, “3% of the population feeds the other 97% of the population.”

“We’re going to work with what we have …, so sub-sizes are used in some areas,” he explains.

This is an unforeseen problem for Venezuelan farmers who are facing fuel shortages due to the collapse of the oil sector.

Productivity at risk

According to Fedeagro, the agriculture sector in Venezuela expects to cultivate 250,000 hectares of maize, 50,000 hectares of rice, 60,000 tons of sugarcane and 70,000 hectares of other crops such as coffee or cocoa.

Fertilizer shortage is a major obstacle. Good fertilization makes a difference: one hectare of corn fields can yield 10-tons, but that number can drop to three or four tons, depending on conditions.

And the problem is shared across Latin America.

Last year, the giant Brazil imported 80.9% of the 40.5 million tonnes of fertilizer it used, and the government said 20% of that import came from Russia. Of the 6.6 million tonnes used by Argentina, 60% was imported and 15% was procured from Russian suppliers.

Mexico, Ecuador, Colombia and Peru are more or less dependent on Russian fertilizers.

On March 3, Ecuador’s President Guillermo Lasso announced that he would subsidize the import of fertilizers due to the “rising cost of agricultural inputs” due to the international crisis.

OAS this week expressed its “serious concern” about the impact of rising fertilizer prices on food production in the region. The agency’s decision, based on World Bank figures, shows a 178% increase in fertilizer prices from March 2021 to March 2022.

Alternatives

Venezuela begins the sowing cycle of essential commodities such as corn and rice.

The decline of the oil industry had an impact on the petrochemical industry, which previously included the internal demand for fertilizers.

“It’s very noticeable,” explains Osman Crowe, vice president of the Fedeagro. “For the last three years we have been bringing in fertilizers ourselves through intermediaries.

Producers are asking to rename the petrochemical complex in Moron, Karapopo, after the late President Hugo Chavez. According to the state-owned PDVSA, it has the capacity to produce 150,000 metric tons of nitrogen and phosphate fertilizers a year.

The campus has been paralyzed since the first half of 2017.

“We have two basic ingredients: urea (nitrogen) and phosphorus and we only need to import potassium chloride,” Fantinel explains.

Alternatives are being explored, but other exporters, due to the situation in Russia, have suspended their sales in order to allocate fertilizer to their domestic markets.

Rubén Carrasco, an agricultural expert at the Lima Chamber of Commerce, told AFP that Russia was seeking a triangle with countries such as Norway to return to the market.

“Other alternative sources may be tried next year,” Plotin reassures himself in Venezuela.