Russia and Ukraine war: How will it impact the South American Bulk Nitrogen market

The market demand for Bulk nitrogen is directly linked to its significant role in producing nitrogen-based fertilizers and the trading of fertilizers in the market. Currently, the price of bulk nitrogen is high, reflecting the high feedstock (natural gas) prices. Brazil being a significant importer of fertilizers, has been affected a lot due to the ban on Russian oil and gas imports. The price hike in natural gas in Europe due to low imports from Russia owing to the disruptions caused by the war led to price hikes of downstream nitrogen fertilizers as natural gas is the primary input for most nitrogen fertilizers. Russia is the largest exporter of various kinds of low-cost crop nutrients. The invasion of Ukraine by Russia has led to multiple setbacks to Russian exports causing severe distress in huge nitrogen importing (breadbasket) countries like Brazil.

Brazil and other South American countries are discussing with the United Nations and European Union to exclude crop nutrients and nitrogen-based fertilizer from the banned list of Russian imports. Brazil is a major producer of soybean, Coffee, and sugar and depends on imports for roughly 85% of fertilizer usage. Around 90% of the fertilizer imports reaching Brazil are from Russia. For Nitrogen-based fertilizers, the dependency on Russian imports increased by more than 90%. Brazil is meeting with Arab countries like Iran to replace the fertilizer imports from Russia, but only one-third of the required fertilizer stock for the summer cropping in September has been secured so far by Brazil.

As per ChemAnalyst, the prices of Bulk nitrogen will continue an upward trend on account of high feedstock (natural gas) prices globally due to the ongoing war between Russia and Ukraine. Since the planting season for major staple crops, including wheat and corn, is nearing, farmers usually stock fertilizers, increasing the demand and driving up the value of Bulk Nitrogen.