Global Risks Threaten Brazil's Record Crop Yield

With the start of September, Brazil embarked on its 2026/27 agricultural season with optimistic expectations for a slight increase in production. However, uncertainties about credit and costs, as well as climatic forces like El Niño, loom over this scenario. According to Conab (National Supply Company) projections, the agricultural output could rise by 1.3% compared to the previous record-high harvest, with expected production of 366.6 million tons. Soybeans are likely to lead this trend with a modest increase of 0.7%, while corn is forecasted to advance more significantly, reaching 148 million tons, up 2.8% from the previous season. Despite these favorable outlooks, a series of external factors pose a threat to realizing this potential agricultural output. Global conflicts have destabilized international markets for fertilizers and fuels, leading to increased costs and complexity in purchasing these inputs. Brazil’s reliance on imported fertilizer is particularly sensitive: it imports nearly 85% of the fertilizers it uses, with 20% coming from external sources, especially Russia. The Petrobras, which accounts for the majority of domestic fuel supply, still depends on imports to meet between 25% and 30% of its needs. This situation creates a vicious cycle where fluctuations in international oil and fertilizer prices are directly passed on to Brazilian consumers. As a result, Brazil’s agriculture faces additional cost pressures that could threaten the profitability of agricultural operations.