INTERVIEW: Yara Brazil president says fertilizer market in Brazil to decrease by 12% in 2026 on demand destruction

The Brazilian fertilizer market is expected to decrease by 12% in 2026, following 25 years of growth, due to higher prices and deteriorating farmer affordability, said Marcelo Altieri, president of Yara Brazil, in an interview with Platts.

"We hadn't seen the Brazilian market decline since 2001 while maintaining steady year-over-year growth, and this year all indications are that we will experience an estimated 12% contraction," Altieri said at his Sao Paulo office on July 21.

Brazil is expected to consume around 43 million mt, down from 49 million mt in 2025, he said.

The head of the Norwegian fertilizer producer in Brazil described a "challenging" year, particularly for phosphate fertilizers. Demand destruction for these products, he estimated, accounts for at least half of the general market's decline.

"Around 2-2.5 million mt of phosphate demand is forecast to be lost," Altieri said. The rest accounts for nitrogen fertilizers. However, a possible urea substitution with ammonium sulfate would make volume calculations tricky, as a lower nitrogen concentration would correspond to higher volumes, he explained. For potassium chloride, it has shown more stable behavior.

"The main reason for the demand loss is farmers' affordability. The conflict unleashed in the Middle East impacted prices, especially in the second quarter, but grain prices did not follow," according to Altieri.

The barter ratio in Brazil worsened, explaining a smaller market: "Farmers decided to invest less, even when nutrient reposition is needed, especially in phosphate fertilizers, which were the most affected due to the timing and with worse soybean profitability," Yara's president said.

With monoammonium phosphate (MAP) rising to $900/mt CFR in May-June, also impacted by sulfur prices, purchase decisions for the season were not made during the window. "There is no longer enough time to recover a volume like last year's," Altieri said.

Hopeful nitrogen season

Another factor adds to complications: the climate phenomenon El Niño. "That uncertainty undoubtedly affects the farmer's decision-making, but it´s too early to put a number on it".

Despite this, and renewed volatility and increases in global urea prices, mostly used for corn, the executive remains optimistic.

"I still don't see demand destruction in nitrogen; there are opportunities to recover deliveries as farmers have more time to make decisions ahead of the safrinha corn season," according to Altieri.

"Corn is better positioned than soybeans today from a profitability standpoint," he said.

Also, farmers can choose a different nitrogen source. "I still see a strong inclination among farmers to use ammonium sulfate," over urea, Altieri said. "The economics are still more favorable for ammonium sulfate in Brazil."

Supply could become a factor as China, the largest supplier of ammonium sulfate, is expected to introduce export inspections. While there are no formal restrictions, they could slow shipments and create timing issues for Brazilian buyers.

Competitiveness, further away

Amid efforts to reduce reliance on imports, Yara´s president has seen local production in Brazil shrink over the last few years.

Yara has shut two plants in Brazil due to a lack of competitiveness, as it ramped up the Rio Grande complex in 2025. "As happened with Yara, many other companies in the industry have made the decision to stop producing here; some did so because of competitiveness, and others because of raw material availability," Altieri said.

With fertilizer prices rising and current geopolitical conditions, he said the possibility of resuming the hibernated plants is moving "further away." "Hibernation makes even more sense," Altieri said.

Yara didn't reduce its market share, as what they "stop producing in Brazil is being covered with increased imports and with the ramp-up of Rio Grande, which is growing."

Platts, part of S&P Global Energy, assessed the granular urea CFR price at $460/mt on July 21.