Brazil could nationalise fertilizers - minister

13 June 2008 16:35  [Source: ICIS news]

HOUSTON (ICIS news)--Brazilian state-run Petrobras might step in to raise the domestic supply of fertilizers or even to nationalise production amid soaring food prices, federal agriculture minister Reinhold Stephanes said on Friday.

Brazil is highly dependent on imported fertilizers. In specific segments, such as producing potassium and phosphates, state intervention might be needed, Stephanes said.

“In principle, we want to ensure that our mines are exploited. But, if it becomes necessary, evidently Petrobras would have to step in. If needed, we will also act, or even nationalise some sectors that are necessary,” Stephanes said in Portuguese, according to state news agency Agencia Brasil.

Local mineral feedstock is considered strategic to Brazil, given that the country is one of the largest agricultural producers in the world.

“We already know in the case of phosphorus, we have mines that could make us self-sufficient in a period of 5-10 years, in nitrogenous fertilizers we also have these conditions, and in the case of potassium, we have a huge mine that needs more technical and environmental analysis because it is located in the Amazon,” Stephanes said.

Stephanes estimated that fertilizers currently represent 40% of production costs for the agricultural sector.

Brazil imports about 70% of the total fertilizers it consumes, he said. The sector is also highly concentrated with only three companies that control more than 75% of the total domestic production of fertilizers.

Stephanes's comments followed a protest at a fertilizer plant in southern Brazil and criticism by local social movements over the presence of foreign entities in the agricultural sector, especially the ownership of land.

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