Jul 14, 2022
Brazil to Purchase Maximum Amount of Diesel Possible From Russia
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers and truck drivers in Brazil are concerned about the high price of diesel fuel and its availability, but the Brazilian Minister of Mines and Energy indicated earlier this week that the country has a 50-day supply of diesel on hand and more is on the way.
The Minister stated that Brazil intends to purchase the maximum amount of diesel fuel possible from Russia and other countries. He feels they can sidestep western sanctions levied against Russia due to its invasion of Ukraine and he does not feel there will be repercussions for the purchases. Brazil does not have the refining capacity to meet its domestic fuel needs, so it must import gasoline and diesel fuel.
The Brazilian president, Jair Bolsonaro, and the Russian president, Vladimir Putin, have been in contact with each other in recent weeks concerning the purchases of needed fertilizers. Brazil needs to import 85% of its fertilizer needs with Russia and Belarus being major suppliers. Putin has guaranteed Brazil that they will supply all the fertilizers Brazil has requested from Russia. In fact, Brazil and Russia continue to have a cordial relationship and they are both members the "Brics" organization of countries along with India, China, and South Africa.
President Bolsonaro is up for reelection to a second term in October and high fuel prices are a major concern for the Brazilian electorate, so he is trying everything possible to keep fuel prices in check.
Diesel prices and availability have also been the source of protests in neighboring Argentina and Paraguay. Farmers in all three countries will start planting their 2022/23 summer crops starting late August or September.