Purchasing activity will depend on weather conditions, supply stability, fertilizer prices, and access to credit for Brazilian farmers.
Brazil is the world’s fourth-largest fertilizer market after China, India and the United States. The country depends heavily on imports, with around 90% of its crop nutrient requirements sourced internationally. Soybean and corn production drive fertilizer consumption, as these crops account for the largest share of planted areas and generate most fertilizer demand. Corn production mainly relies on nitrogen fertilizers, while soybeans rely heavily on phosphates. Both crops also require potash.
It’s still uncertain how much the Brazilian fertilizer market will reach in 2026. The most optimistic scenario from experts is 45 Mt, still down by 4 Mt from last year. Several factors are contributing to uncertainty around demand through the end of the year:
• Tighter fertilizer supply and product switching
Geopolitical tensions and export disruptions from the Gulf region have tightened availability, particularly for urea and phosphates such as MAP (monoammonium phosphate). At the same time, sulphur, a key raw material used to produce phosphoric acid and, consequently, phosphate fertilizers, remains in short supply. Strong demand from Indonesia’s nickel sector and export interruptions in the Middle East and Russia are further supporting the market. To offset the tight availability, Brazilian buyers have turned to ammonium sulphate as a source of both nitrogen and sulphate. Low supplies of SSP further exacerbate the sulphur availability this season. On phosphates, the Chinese ban on exports, due to escalating costs of this raw material, has also severely reduced available supplies, especially for NPs.
• High borrowing costs and limited access to credit
Credit remains a key source of financing for farmers. Brazil’s benchmark interest rate, known as the Selic rate, stands at 14%, keeping borrowing costs high. At the same time, agricultural loan delinquency at Banco do Brasil, one of the country’s largest agricultural lenders, almost doubled from 3.16% in June 2025 to 6.27% in June 2026. To support the 2026/27 planting season, the Brazilian government’s annual agricultural financing program, Plano Safra, provides R$525.1bn in credit from July 2026 to June 2027, including subsidized loans. However, it remains unclear how much this will improve the situation.
• Risks to crop yields from El Niño
El Niño is a climate phenomenon associated with unusually warm waters in the tropical Pacific Ocean. The current event began in June 2026 and is expected to strengthen in the coming months, potentially becoming one of the strongest since 1950. It may continue until March 2027, bringing hotter, drier conditions to central and northern Brazil and heavier rainfall to the south. This increases the risk of droughts, floods and fires.
Experts are cautious about Brazil’s fertilizer sector outlook. Driven by the disruption in import flows, Brazilian buyers will resort to drawing down existing stocks and eventually reduce fertilizer application this season. The flip side is that lower stocks and lower application rates bode well for the next crop year.
