Customer Logins

Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.

Customer Logins

My Logins

All Customer Logins
S&P Global Commodity Insights
  • S&P Global
  • S&P Dow Jones Indices
  • S&P Global Engineering Solutions
  • S&P Global Market Intelligence
  • S&P Global Mobility
  • S&P Global Commodity Insights
  • S&P Global Ratings
  • S&P Global Sustainable1
Close
Discover more about S&P Global’s offerings.
Investor Relations
  • Investor Relations Overview
  • Presentations
  • Investor Fact Book
  • News Releases
  • Quarterly Earnings
  • SEC Filings & Reports
  • Executive Committee
  • Merger Information
  • Governance
  • Stock & Dividends
  • Shareholder Services
  • Contact
English
  • Español
  • 中文网站
  • Português
  • 한국어
  • हिंदी
  • English (Australia)
  • 日本語
Support
  • Get Support
  • System Notifications
  • Delivery Platforms
  • Regulatory Engagement
Login
  • Commodity Insights Login
  • Access IHS Markit Products
Register
  • Commodities
  • Products & Services
  • Methodology
  • Market Insights
  • Energy Transition
  • Events
  • S&P Global
  • S&P Dow Jones Indices
  • S&P Global Engineering Solutions
  • S&P Global Market Intelligence
  • S&P Global Mobility
  • S&P Global Commodity Insights
  • S&P Global Ratings
  • S&P Global Sustainable1
  • Oil Upstream LNG Natural Gas Electric Power Coal Shipping Petrochemicals Metals Agriculture
    Latest in Commodities
    Listen: The future of naphtha and diesel flows after EU sanctions

    What will replace Russian diesel and naphtha flows to Europe after EU sanctions take effect on 5...

    UK's January road fuel sales recover to highest for month since 2020

    The UK's road fuel sales recovered from seasonal lows in January to hit their highest average for...

    China to cut clean oil product exports in Feb amid strong domestic demand

    China's refineries will cut clean oil product exports in February as domestic demand in January was...

  • Oil LNG Natural Gas Electric Power Coal Shipping Petrochemicals Metals Agriculture Energy Transition
    I Need
    Market Insights and Analytics Commodity Prices and Essential Market Data Real-Time News, Prices and Analysis Maps and Geospatial Data Forward Curves and Risk Valuation Data
    Data and Partner Delivery
  • Our Methodology Methodology & Specifications Price Assessments Subscriber Notes Price Symbols Symbol Search & Directories Corrections Complaints
    References
    Market On Close Index Sourced Data (Survey) Methodology Review & Change MOC Participation Guidelines Holiday SEE ALL REFERENCE TOOLS
  • Latest News Headlines All Topics Videos Podcasts Special Reports Infographics Insights Magazine Insight Blog    Research & Analysis Top 250 Rankings   
    Latest in Market Insights
  • PLATTS ANALYTICS PRODUCT PLATFORM
    ACCESS ANALYTICS HUB
  • All Events Webinars Conferences Methodology Education Training and eLearning Forums Global Energy Awards    Global Metals Awards   
    Featured Events
    Forums London Energy Forum
    • 27 Feb 2023
    • London
    Forums CERAWeek
    • 27 Feb 2023
    • London
    Conferences ,Forums FUJCON 2023
    • 13 Mar 2023
    • Fujairah, UAE

Sanctions, uncertainty and cost fears stalk Latin American agriculture

13 June 2022 Robert Birkett

Uncertainty and fear over rising costs are gripping South American agriculture in the wake of the ongoing Ukraine war. The uncertainty is a mix of the double impact of the Covid-19 pandemic and the war along with its subsequent wave of sanctions and the insecurity of what may come next.

The uncertainty is led by higher oil prices impacting costs across the board, the pressure of growing inflation due to the 2021 supply issues, and the container crisis coming out of the Covid-19 pandemic, Croplife Latin America's Jose Perdomo says. "Another factor is lack of certainty from the US and EU coming up with sanction packages [in the wake of Russia's invasion of Ukraine] nearly every week," the association president warns. "It isn't straightforward to determine with whom you can do business."

Tulio Oliveira of the Brazilian generic agrochemical industry association, the Aenda, reports that the major impacts of the war in Brazil have been the increased cost of grain; a rise in the cost of fuels from oil, gas and biofuel; as well as on the price and availability of fertiliser, interest rates and insurance contracts; and worsened currency volatility and fears over non-payments of invoices.

"We expect higher commodity prices," Mr Perdomo agrees. "Recent global information shows increased plantings of maize, wheat, soybeans, and palm oil and a potential decrease in rice yields due to potentially lower fertiliser use for 2022." However, he stresses that the higher fertiliser prices predate the Ukraine war with a 2021 "containers and Chinese energy crisis".

There is little evidence so far that the situation is boosting the prices of crop protection products other than for adjustments due to generalised inflation "In the short term, 2022 disruptions on crop protection products may be minimal due to the extended supply chains and products made in 2021 for the 2022 season," Mr Perdomo notes. "What happens in 2023 is another matter."

Sanctions

Both industry leaders note that sanctions are being followed in South America as they are unavoidable due to their imposition by major powers or the UN. "Brazil must comply [as a UN member]," Mr Oliveira cites. Mr Perdomo echoes his Brazilian counterpart that the region is not imposing official embargoes, but is impacted by international obligations. "[Latin America] is impacted indirectly by those [sanctions imposed] by the US and EU," he notes. "If a supplier or customer can't use SWIFT accounts to do business, the region is de facto bound by sanctions imposed elsewhere."

Mr Oliveira cites Brazil's attempts to limit certain sanctions that may impose further human costs. "In the case of fertilisers, the Minister of Agriculture paid a visit to Russia and the Brazilian ambassadors spoke with several countries and the UN, to negotiate an exception." Brazil has since accepted fertiliser cargoes from Russia, while debate has ignited over the country becoming more self-sufficient in vital supplies, such as fertiliser.

Neither has noticed the conflict leading to higher demand for Latin American agriculture or an indirect boost to supplies from the region. "So far, no, but if the war continues, we will certainly have additional orders," Mr Oliveira offers. The Croplife Latin America president repeats the warning of the uncertainty hitting a potential boost to the region. "You may think that countries not involved in the conflict would be quick on their feet to supply markets that would otherwise buy from Ukraine and internationally sanctioned countries such as Russia and Belarus. But finding new markets is not an instant process, especially for the grain trade; it will take time," Mr Perdomo notes.

"Also, bear in mind the conflict rose just before spring in Ukraine. Although it is fair to say that Ukraine's output capacity will be quite diminished [Mr Perdomo cites a Blomberg report forecasting a 17% decrease in plantings in Ukraine], it will be only after harvest that the situation may be assessed."

The Croplife president says that the total planting area in Brazil is expected to have expanded up to 5% with increases expected for most major crops, but within smaller crop segments, farmers are at best conservative in planting, if not reducing, crop areas of fresh fruits and vegetables, for domestic consumption. "The steep rise in fertiliser prices and concern about potential scarcity was the driver. Again, in this case, it is primarily a legacy of 2021, and the conflict came only to add complexity for farmers."

Crisis moves

Several crisis policies are being implemented in Latin America. The policies have largely been a response to crises from last year from the impact of the Covid-19 pandemic to the container and Chinese energy crisis, Mr Perdomo cautions.

The Colombian government has suspended duties for six months on 145 products, including some pesticides and fertilisers, and is mulling monitoring crop protection and fertiliser prices for a potential intervention "if needed". The Peruvian government recently declared a 120-day state of emergency for the agriculture sector to implement extraordinary measures to support farmers, while Guatemala is considering distributing a $130 subsidy to farmers to purchase fertiliser and crop protection products.

The Latin American industry leaders gave their views in the first two months following the Russian invasion of Ukraine.

Posted 13 June 2022 by Robert Birkett, News Reporter, Agribusiness



This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.

Previous Agribusiness Post All Agribusiness Next Agribusiness Post

Related Posts

  • Gene-edited crops market growth spurred by regulatory progress and approvals
  • EU Council calls for F2F pesticide reduction impact re-assessment
  • EU glyphosate approval extended by one year
  • EU agrees on "groundbreaking" law to ban agri-food imports contributing to deforestation
  • Global crop protection market provisionally up 6% in 2022
  • Biostimulants market growing strongly at 10% per annum
  • US EPA to deliver cyantraniliprole evaluation under court vigil
  • EU glyphosate approval interim extension stalled again

Explore

RELATED INDUSTRIES & TOPICS
  • Agribusiness
  • Agribusiness Price Risk Management
  • Agribusiness Strategy
  • Commodities

Learn more about Agribusiness

Visit our site
Learn more
Subscribe to RSS Feed

Follow Us

Dec 31
SPGlobalAgri@SPGlobalAgri

𝗛𝗮𝗽𝗽𝘆 𝗡𝗲𝘄 𝗬𝗲𝗮𝗿! 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 - A new journey for a new year! This account will be retired tomorrow. To keep up to da… https://t.co/3oV03q8zt6

Dec 31
Dec 30
SPGlobalAgri@SPGlobalAgri

𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗡𝗲𝘄𝘀! 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 - This account will be retired in 2 days. To keep up to date with the latest… https://t.co/8ndUelbCeA

Dec 30
Dec 29
SPGlobalAgri@SPGlobalAgri

𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗡𝗲𝘄𝘀! 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 - This account will be retired in 3 days. To keep up to date with the latest… https://t.co/vEy5KSqAaV

Dec 29
Dec 28
SPGlobalAgri@SPGlobalAgri

𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗡𝗲𝘄𝘀! 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 - This account will be retired in 4 days. To keep up to date with the latest… https://t.co/Csc160u0et

Dec 28
{"items" : [ {"name":"share","enabled":true,"desc":"<strong>Share</strong>","mobdesc":"Share","options":[ {"name":"facebook","url":"https://www.facebook.com/sharer.php?u=http%3a%2f%2fwww.spglobal.com%2fcommodityinsights%2fen%2fci%2fresearch-analysis%2f-sanctions-uncertainty-cost-latin-american-agriculture.html","enabled":true},{"name":"twitter","url":"https://twitter.com/intent/tweet?url=http%3a%2f%2fwww.spglobal.com%2fcommodityinsights%2fen%2fci%2fresearch-analysis%2f-sanctions-uncertainty-cost-latin-american-agriculture.html&text=+Sanctions%2c+uncertainty+and+cost+fears+stalk+Latin+American+agriculture++%7c+S%26P+Global+","enabled":true},{"name":"linkedin","url":"https://www.linkedin.com/sharing/share-offsite/?url=http%3a%2f%2fwww.spglobal.com%2fcommodityinsights%2fen%2fci%2fresearch-analysis%2f-sanctions-uncertainty-cost-latin-american-agriculture.html","enabled":true},{"name":"email","url":"?subject= Sanctions, uncertainty and cost fears stalk Latin American agriculture | S&P Global &body=http%3a%2f%2fwww.spglobal.com%2fcommodityinsights%2fen%2fci%2fresearch-analysis%2f-sanctions-uncertainty-cost-latin-american-agriculture.html","enabled":true},{"name":"whatsapp","url":"https://api.whatsapp.com/send?text=+Sanctions%2c+uncertainty+and+cost+fears+stalk+Latin+American+agriculture++%7c+S%26P+Global+ http%3a%2f%2fwww.spglobal.com%2fcommodityinsights%2fen%2fci%2fresearch-analysis%2f-sanctions-uncertainty-cost-latin-american-agriculture.html","enabled":true}]}, {"name":"rtt","enabled":true,"mobdesc":"Top"} ]}
Filter Sort
  • About S&P Global Commodity Insights
  • Media Center
  • Advertisers
  • Locations
  • Get Support
  • Contact Us
  • Careers
  • Corporate Responsibility
  • History
  • Investor Relations
  • Leadership
  • Glossary
  • © 2023 by S&P Global Inc. All rights reserved.
  • Terms of Use
  • Do Not Sell My Personal Information
  • Privacy Policy & Cookie Notice
  • Site Map