Brazilian farmers may be squeezed by the escalating conflict in the Middle East, according to analysts and trade data showing the region is a key destination for Brazil's farm exports and an important provider of fertilisers such as urea.
The US-Israeli strikes on Iran, which has in turn launched attacks on other countries in the region and disrupted maritime traffic through the Strait of Hormuz, may spark grain contract cancellations, and fertiliser shortages in Brazil, which is highly dependent on imports.
Shippers are weighing whether to unload grain cargoes in Oman to avoid trouble in the Persian Gulf, according to consultancy Argus.
"The alternative would be to cancel shipments," Argus told Reuters. "It is also still uncertain whether cargoes could be delivered in Oman and from there be sent to their final destinations by truck or rail."
Bulk cargoes such as corn enter the Middle East through the Strait of Hormuz, said Arthur da Anunciacao Neto, owner of shipping agency Alphamar Agencia Maritima. The threat to shipping in increasingly dangerous waters has driven up the cost of maritime insurance, he said.
Ten ships are set to leave for Iran in the next few days with more than 600,000 tons of Brazilian soybeans and soymeal, according to Alphamar data. Those cargoes, depending on circumstances, may be diverted to other destinations, Neto said.
Iran was the main destination for Brazil's corn exports last year, buying some nine million tons or 20 per cent of shipments. Most of Brazil's corn is shipped in the second half of the year.
Middle East fertiliser producers, especially Iran, are also important suppliers to Brazilian farmers.
Data from consultancy Agrinvest shows Brazil covered 100 per cent of its urea needs with imports in 2025. An estimated 41 per cent of those imports, or nearly three million tonnes, passed through the Strait of Hormuz before reaching Brazil, the data showed.
Francisco Vieira, director at consultancy Agroconsult, said the war will likely restrict urea supplies and raise prices in the short term.
"Nothing is expected to come from Iran," Vieira said. "We do not even know if their factories are being bombarded."
Government data shows Brazil imported 7.7 million tonnes of urea last year, with shipments from Iran representing less than 2.5 per cent of that.
But Iran's shipments are often routed via Oman due to US sanctions affecting settlement of international trade with Iranian parties, and private estimates suggest Iran is the origin of around 1.3 million to 1.4 million tonns of Brazilian annual imports.
"The absence of Middle East suppliers will cause [a urea] supply imbalance," StoneX's Renato Françoso told Reuters. The Middle East exports an estimated 22 million tonnes of urea, accounting for about 40 per cent of global trade, he said.
A prolonged conflict could affect fertiliser deliveries ahead of Brazil's 2026/2027 crop cycle that begins planting in September, analysts say.
Thamires Cateli, founder of consultancy and brokerage firm Hudie Consulting, said the war in Iran caused sellers to withdraw urea price lists this week, disrupting global trade.
Other countries could replace part of any lost Iranian shipments to Brazil, but second-order effects are still unclear.
Production in Egypt, which accounts for about eight per cent of global supplies, relies on natural gas supplies from Israel, which may also be threatened, StoneX's Françoso said.
China, another large fertiliser producer, has been cutting exports in recent years to supply its internal market. Russia, which accounted for an estimated 16 per cent of global urea supplies in 2024, could also fill the gap. But drone attacks such as the one against a fertiliser plant in Smolensk last month have underscored threats to those supply lines.
(Reporting by Ana Mano and Roberto Samora Editing by Brad Haynes, Kirsten Donovan)
