Brazilian farmers are delaying purchases of fertilizers and other crop inputs as they await a congressional vote on a bill to restructure rural debt, weighing on sales at agricultural retailers, according to Mosaic Co.’s country manager for Brazil and Paraguay.
The uncertainty surrounding the proposed legislation is compounding an already challenging credit environment and could curb fertilizer application in the 2026/27 growing season, reducing crop yields, Eduardo Monteiro, Mosaic’s country manager for Brazil and Paraguay, told reporters after the World Agri-Tech Summit in São Paulo on Tuesday.
“A bill currently under discussion in Congress would provide relief for part of farmers’ debt, and that is having a negative impact—not on fertilizer manufacturers, but on distributors,” Monteiro said. “Farmers are waiting for the bill to be approved before making purchasing decisions.”
The delay has worsened conditions across the agricultural supply chain, he said.
“Our conversations with the largest distributors show that conditions in April, May and June didn’t improve—they deteriorated,” Monteiro said. “That has heightened concerns among everyone in the agricultural credit chain.”
Higher fertilizer prices are also expected to weigh on demand, particularly for phosphate products. Monteiro said the industry has yet to see any practical effect from the agreement between the US and Iran that was expected to restore shipping through the Strait of Hormuz.
“Even if commercial flows accelerate, it still takes three to four months, in an optimistic scenario, for material to reach the industry and be processed,” he said.
Production has also been constrained after some refineries in the Middle East were damaged by airstrikes, limiting output, he said.
“We expect the market to normalize over a period of six to 18 months.”
Despite the end of the conflict involving Iran, Monteiro said he does not expect phosphate prices to retreat meaningfully before the next planting season. Prices had already been rising before the conflict, supported by growing sulfur demand from the electric vehicle battery industry.
“For the next summer crop, prices could gradually move back toward pre-war levels, but those levels were already high,” he said.
Supply conditions, however, have improved.
“We have the capacity to meet all demand,” Monteiro said. “We’re not looking at a surplus, but the risk of shortages has been significantly reduced.”
While inventories remain lean, they should be sufficient when combined with imports, he said.
“In nutrient terms, phosphorus imports have fallen, but not in absolute tonnage because buyers have shifted to lower-concentration products such as single and triple superphosphate,” Monteiro said. “That suggests we’ll have enough supply to get through the year.”
