Conflict in the Middle East could put pressure on agricultural costs, warns CNA.

The Brazilian Confederation of Agriculture and Livestock (CNA) participated, this Tuesday (17), in the weekly meeting of the Parliamentary Agricultural Front (FPA), in Brasília, which discussed the impacts of the conflict in the Middle East on Brazilian agriculture. The entity's technical director, Bruno Lucchi, and the director of International Relations, Sueme Mori, followed the debates. In his presentation, Lucchi highlighted that the escalation of tensions in the region, especially involving strategic areas such as the Strait of Hormuz, can generate significant effects on production costs, logistics and input prices in Brazil. The region concentrates about 20% of the global trade in oil and natural gas, in addition to accounting for up to 35% of the world trade in ammonia and urea and 30% of fertilizers traded in the world. According to the director, any interruptions in maritime traffic in the region tend to directly impact the global market, increasing freight, insurance and logistics costs. “This could result in increased costs for essential agricultural inputs, especially fertilizers,” he warned. Brazil imports about 12% of its fertilizers from the Middle East, and 35% of the urea used in the country originates from the region. In this context, Lucchi pointed out that the market is already feeling the effects of the conflict, with urea prices rising between 30% and 35% since the beginning of the conflict. In the case of oil, international prices have risen by up to 51%, also putting pressure on fuel costs such as diesel. Lucchi also warned that the conflict tends to increase volatility in the markets, affecting prices, futures contracts, and exchange rates. “This scenario makes it difficult for rural producers to plan and could compromise input purchasing decisions.” Measures and proposals – The director spoke about the CNA's proposals presented at the meeting, aimed at reducing taxes on diesel, enforcement measures to prevent price gouging, increasing the biodiesel blend in diesel (from 15% to 17%), approving policies to stimulate domestic fertilizer production, and reducing the rate of the Additional Freight for Renewal of the Merchant Marine (AFRMM).

This text was translated by machine from Brazilian Portuguese.