Brazil Foreign Minister Carlos Franca said during a hearing that he would be negotiating the possibility of easing the embargoes against Iran with the current U.S. Secretary of State Antony Blinken. Franca’s main interest would be to facilitate the flow of fertilizer imports to Brazil, as today many Brazilian companies avoid any kind of relationship with Iran to avoid U.S. sanctions. Currently, commercial conditions are limited to barter payments.
Iran is a major producer of urea and ammonia, with an estimated annual capacity of 7.7 and 5.8 million tons, respectively, for 2022, according to Bloomberg Intelligence. Under current trade relationship conditions, Iran exports about 9 percent of its production, approximately 350,000 mt of urea, throughout the year to Brazil. This amount represents 3-4 percent of the total volume of Brazilian urea imports.
Since the visit of former Agriculture Minister Tereza Cristina to Tehran in January, there has been interest from both sides in strengthening trade relations, and by that time the Iranian authorities had already pointed out possibilities to export a greater volume of urea to Brazil.
In this context, there is an opportunity for Brazil to reduce its dependence on Russian urea, as Iran still has idle productive capacity to supply much of the Brazilian demand. Currently, Russia accounts for about 18 percent of Brazil’s urea consumption (1.4 million mt), and a redirection of demand to the Iran market could lessen the impact of sanctions imposed against Russia in the current conflict scenario in Europe.