A farm in Brazil. (AP)

A farm in Brazil. (AP)

LatAm in Focus: From Fertilizers to Fuel—What the Ukraine Crisis Means for Latin America

By Chase Harrison

Russia’s invasion is complicating the region’s already rocky pandemic economic recovery. The Wall Street Journal’s Samantha Pearson shares the view from Brazil.

It’s been about two weeks since Russia invaded Ukraine, shocking and destabilizing a world still reeling from the Covid-19 pandemic. And thousands of miles away, Latin America is feeling the economic effects.

Samantha Pearson

One reason? Fertilizer. And supply shortages are particularly hard felt in the region’s largest economy. “Brazil is the major agricultural superpower that relies on imported fertilizers. It imports about 85 percent of its fertilizers. A fifth of that comes from Russia,” explains Samantha Pearson, São Paulo-based correspondent for The Wall Street Journal in a conversation with AS/COA Online’s Chase Harrison. 

Even before the crisis, Brazil was struggling to secure sufficient fertilizer, making it an agenda item when President Jair Bolsonaro met with Russian President Vladimir Putin during a February visit to Moscow days before the invasion. It turns out Bolsonaro may have not secured what he needed to on the trip, given that the conflict has only made it harder for Brazil to acquire the fertilizer it needs to power its substantial agriculture sector, says Pearson. She explains, “If farmers are paying more for fertilizer, if food prices are going up in Brazil, that affects families.”

“Brazil and Russia have been getting closer over the past few years, and that approximation pre-dates Bolsonaro.”

Even before this crisis, those families were already struggling with the high price of consumer goods, inflation, and the residual economic effects of the pandemic. That leads to a political impact as well, says Pearson, as Brazil approaches the October general elections. “Brazilians are very practical when they vote. They don’t really care about the left. They don’t care about the right. They don’t care about political parties. They care about the price of beans.”

Can Brazil and other Latin American countries find a way to take advantage of current gaps in the market? Pearson is skeptical. “In theory, Brazil could be stepping up producing more wheat, which is something that the Ukraine produces. But again, then it’s got a problem with fertilizers. So, there’s always a ‘but’ lurking around the corner.” With oil, too, Pearson believes Latin America will struggle to meet market needs and that could produce devastating impacts. “If the cost of oil goes up, then the cost of rent goes up and then people get higher wages and then spiraling out of control. That's the fear.”

Luisa Leme produced this episode.

The music in this episode is “Menino das Laranjas" performed by Jamile Staevie and Saul Cosme. Check out more performances at musicoftheamericas.org.

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