Brazil’s Congress may probe whether a cartel of fertilizer producers exists in the South American country, a lower house lawmaker said.
The agriculture committees in the Senate and lower house are considering forming a commission to investigate why fertilizer prices have surged, hurting farmers’ income and raising food costs, Lower House Deputy Moacir Micheletto said today.
“There’s a cartel in Brazil and we need to dismantle it,” Micheletto, a member of the lower house’s committee, said in a telephone interview today from Parana state.
Fertilizer prices gained about 50 to 70 percent since 2007 in Brazil, hurting farmers profits as fertilizer accounts for about 70 percent of production costs, Micheletto said. Brazilian Agriculture Minister Reinhold Stephanes said in a Jan. 6 interview that the domestic fertilizer market is controlled by three companies.
“Fertilizers are the main cause for profit losses in Brazil’s agriculture,” Micheletto said. “We have the support of most of lawmakers at the committees to investigate this deeply.”
Brazilian President Luiz Inacio Lula da Silva is pressuring companies to explore mines and make the country self-sufficient in crop nutrients after prices surged. Lula will send a bill to Congress in the first half of this year proposing a new regulatory model for mines exploration and fertilizer production, Stephanes said.
Vale Purchase
Vale SA, the world’s biggest iron-ore producer, agreed this week to buy 100 percent of Bunge Participacoes e Investimentos, and Bunge’s 42.3 percent stake in Brazilian fertilizer producer Fertilizantes Fosfatados SA, known as Fosfertil. Yara Brasil Fertilizantes SA said yesterday it plans to sell a 16 percent stake in Fosfertil to Vale.
Brazil, the world’s largest grower of sugar and coffee, imports more than 90 percent of its potash needs, 49 percent of its phosphates needs and 75 percent of its nitrogen-based fertilizer raw materials, according to the national mining department.