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325231

Brazil launches national fertilizer plan to lower dependence on imports

SAO PAULO, March 11 (Reuters) - Brazil on Friday launched a national fertilizer plan aimed at reducing its dependence on imports after the war in Ukraine and Western sanctions pushed up costs and threatened productivity in the Latin American farming powerhouse.

The plan underscores concern in Brazil, the world’s largest importer of fertilizers, about inputs for major export crops such as soybeans, corn and sugarcane, which account for 73% of the nation’s fertilizer use.

The Agriculture Ministry said the plan aims to reduce imports to 45% of total domestic fertilizer consumption by 2050, from 85% currently.

With new incentives for private investment in fertilizer production, the government aims to reduce reliance on China, Canada and Morocco – as well as Russia and Belarus, whose exports are now crimped severely by sanctions.

Canada is Brazil’s largest source of potash, which represents 38% of domestic fertilizer use, but Russia and Belarus together provide nearly half of supplies.

Phosphorus comprises 33% of total fertilizer use in Brazil, while nitrogen represents 29%, according to the ministry.

Experts have warned it will take years of heavy investment for Brazil to expand fertilizer production.

Fertilizer lobby Anda reports domestic fertilizer use grew by 28% in the past two years, making Brazil the world’s fourth-largest consumer.

Marcelo Mello, head of fertilizers at consultancy StoneX, said Brazil’s potash mines are not as competitive as those located in Canada, Belarus, and Russia, while its phosphorous reserves pale next to those of Morocco, Saudi Arabia, Russia, and China.

“Mines depend on God putting them there,” he said.

Brazil’s most promising potash project, in the Amazon region, could eventually produce some 2 million tonnes per year, Mello said, which would satisfy just part of Brazil’s annual consumption of around 13 million tonnes.

Producing nitrogen fertilizers would require major industrial investments and huge amounts of energy, which would not be cheap in Brazil, Mello added.

(Reporting by Roberto Samora and Ana Mano in São Paulo and Lisandra Paraguassu in Brasília. Additional reporting by Gabriel Araujo in Sao Paulo. Editing by Brad Haynes, Jonathan Oatis, and Matthew Lewis.)

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