September 15, 2026
Competitive Attractiveness of the Brazilian Fertilizer Sector: Application of Porter’s Model
Leonardo da Silva Prado; Rodolfo Ribeiro
DOI: 10.22167/2675-6528-202602256
Article derived from a Final Course Work (TCC), with content based on the student’s original work and adapted to the editorial format of the E&S Magazine with the support of the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute for textual synthesis and organization.
Abstract
The Brazilian fertilizer sector, essential for agricultural productivity and food security, was analyzed to assess its competitive attractiveness using Porter’s Five Forces model (1980). The research used sectoral data, legislation, and institutional reports to examine entry barriers, the threat of substitute products, the bargaining power of suppliers and customers, and rivalry among competitors. It was observed that the sector presented high attractiveness for established companies, but with substantial barriers for new entrants, driven by economies of scale, regulatory costs, and infrastructure investments. The threat of substitutes, such as bio-inputs and green ammonia, grew due to technological advancements and public policies. Supplier bargaining power remained high due to international concentration and geopolitical shocks, while buyer power, although relevant, was limited by high switching costs and supply disruption risks. Rivalry among competitors was intense, characterized by low product differentiation and competition based on price and logistical efficiency. It was concluded that the sector’s competitive dynamics are complex, marked by external dependence and sensitivity to external factors, requiring continuous operational efficiency and adaptive strategies. The results provided strategic subsidies for managers and organizations in the fertilizer chain.
Keywords: Porter’s Five Forces; Competitiveness; Strategies; Market Structure; Industry.
1. Introduction
Brazil ranks as the fourth largest global consumer of fertilizers, with soybeans, corn, and sugarcane accounting for over 73% of total consumption (MAPA, 2023). Despite this significant demand, the country imports approximately 80% of the fertilizers used, revealing a high external dependence and concentration in a few suppliers (MAPA, 2023). This condition makes the Brazilian economy, strongly anchored in agribusiness, vulnerable to fluctuations in the international fertilizer market.
The main fertilizers consumed in Brazil, such as phosphorus, potassium, and nitrogen, largely depend on natural reserves or processes that require high energy consumption (Embrapa, 2025). Although the country is self-sufficient in inputs like limestone and agricultural gypsum, national production of intermediate fertilizers has decreased, from 9.3 million tons in 2013 to 7 million in 2024 (ANDA, 2025). In contrast, imports have grown significantly, reaching 41.3 million tons in 2024, highlighting a growing gap between domestic supply and demand (ANDA, 2025).
The continuous increase in the amount of fertilizers delivered to the Brazilian market, which reached 45.8 million tons in 2021 with positive projections for 2025 (ANDA, 2025), does not translate into self-sufficiency. This dynamic reinforces the urgency of understanding the challenges and opportunities inherent in external dependence and the sustainability of national production.
To analyze the complexity of this scenario, the present study adopts Porter’s five forces model (1980) as a theoretical framework. This model postulates that the attractiveness and profitability potential of an industry are fundamentally determined by its competitive structure. The analysis of these forces allows for the identification of factors that shape competitiveness and the capacity for capital gains generation in the sector.
Porter’s five forces (1980) include the threat of new entrants, the threat of substitute products, the bargaining power of suppliers, the bargaining power of customers, and the intensity of rivalry among competitors. The weaker these forces are, the more attractive the industry tends to be. High entry barriers, such as high investments and economies of scale, increase attractiveness, while the presence of many substitutes or intense competition reduces profitability.
Given this context of high external dependence, vulnerability to international shocks, and the need to ensure the sustainability of agricultural production, understanding the competitive dynamics of the fertilizer sector is crucial. The sector is highly dynamic, integrated into international trade, and essential for the performance of agricultural production (Embrapa, 2025). The vulnerability of this segment can compromise the country’s productivity and food security. Thus, the objective of this work is to evaluate the attractiveness of the Brazilian fertilizer sector through Porter’s five forces model (1980).
2. Material and Methods
This research adopts the sectoral analysis methodology, based on the principles presented by Porter (1980). It is an applied research, with a qualitative approach and exploratory character.
The research process was delimited according to the case study protocol presented in Table 1.
Table 1. Case Study Protocol
| Objective | Research steps | Information gathered | Sources used |
|---|---|---|---|
| Assess the attractiveness of the Brazilian fertilizer sector through Porter’s five forces model (1980) | Information gathering on entry barriers | – Economies of scale (minimum scale required); – Legal barriers; – Access to raw materials; – Logistics and Infrastructure. | ANDA (2025); ANTAQ (2026); Embrapa (2025); MAPA (2022); MDIC (2025); Bastiani et al. (2024); Carlton and Perloff (2015); Law nº 6.894 (1980); Law nº 10.925 (2004); Law nº 13.703 (2018); Law nº 14.515 (2022); Law nº 15.070 (2024); Perá, Filho and Caixeta-Filho (2021); Porter (1980). |
| Information gathering on substitute goods barriers | – Cost and performance of alternatives; – Types of available substitutes; – Market trends for biofertilizers; – Public policies. | Decree No. 10.375/2020; Embrapa (2026); Porter (1980); RMI and E+ Institute (2023). | |
| Information gathering on supplier bargaining power | – Supplier concentration; – International price volatility and geopolitical factors; – Switching costs; – Integration capacity (verticalization). | IFA (2015); IFDC (2026); ITAÚ BBA (2026); MAPA (2023); MDIC (2025); Ogino e Gasques (IPEA, 2023); Porter (1980); SEC (2023). | |
| Information gathering on buyer bargaining power | – Buyer concentration; – Price sensitivity; – Switching cost; – Public policies. | CNA (2018); Conab (2026); Embrapa (2026); IFA (2015); IFDC (2026); ITAÚ BBA (2026); Law nº 13.703/2018; MAPA (2023); Porter (1980). | |
| Information gathering on competitor rivalry. | – Market structure; – Demand growth; – Product differentiation; – Cost structure; | ANDA (2026); Bastiani et al. (2024); Carlton and Perloff (2015); CEPEA (2023); Conab (2026); Embrapa (2025); IFA (2015); MAPA (2023); Porter (1980). | |
| Consolidation and analysis of information | – Threat of new entrants; – Threat of substitute products; – Bargaining power of suppliers; – Bargaining power of customers; – Rivalry among existing competitors. | ANDA (2025); ANDA (2026); Bastiani et al. (2024); CEPEA (2023); Decree No. 10.375/2020; Embrapa (2025); Embrapa (2026); IFDC (2026); IFA (2015); ITAÚ BBA (2026); Law No. 6.894/1980; Law No. 13.703/2018; MAPA (2023); MDIC (2025); RMI and E+ Institute (2023). |
Information gathering on entry barriers
The survey of information on entry barriers included the assessment of economies of scale, analyzed through the Minimum Efficient Scale (MES). The MES was calculated using the formula MES = Total Demand * 0.05, applying the 5% rule to determine the production level at which long-run average costs would be minimized.
The legal barriers were analyzed through a descriptive approach based on legislation and official documents. The method consisted of identifying the main sector regulations, such as official fertilizer control laws, self-control programs, the bioinputs framework, and the minimum freight floor, assessing whether they imposed structural restrictions on entry, altering costs, minimum operating requirements, or competitive conditions.
Access to raw materials was evaluated by a descriptive approach based on secondary data from the Ministry of Development, Industry and Commerce [MDIC] (2025). These data were used to map the origin of inputs and analyze historical import series between 2019 and 2025, as synthesized in Table 2.
Table 2. Historical Series of Brazilian imports of chemical fertilizers, except raw fertilizers.
| Period | FOB Value US$ (Billions) | Millions of Tons | US$ FOB Price / Kg |
|---|---|---|---|
| 2019 | 9.121.411.232 | 31.1 | 0.29 |
| 2020 | 8.008.734.575 | 34.2 | 0.23 |
| 2021 | 15.135.996.824 | 41.6 | 0.36 |
| 2022 | 24.702.864.236 | 38.1 | 0.65 |
| 2023 | 14.610.711.001 | 40.9 | 0.36 |
| 2024 | 13.549.805.865 | 44.3 | 0.31 |
| 2025 | 15.464.518.411 | 45.5 | 0.34 |
Source: [MDIC] (2025)
Logistics and infrastructure were analyzed using data from the Ministry of Agriculture and Livestock [MAPA] (2023), the National Association for Fertilizer Diffusion [ANDA], the National Waterway Transport Agency [ANTAQ] (2026), and specialized literature. The method involved mapping the modes of transport used, evaluating port conditions and logistics corridors, and interpreting these factors based on Porter’s Five Forces to examine import and distribution flows and identify bottlenecks.
Information Survey of Substitute Goods Barriers
The cost and performance of alternatives were evaluated by a descriptive and comparative approach. Data from the Rocky Mountain Institute, Instituto E+ (2023), and Embrapa (2026) were used to compare ammonia production costs (green, gray, and blue) and costs per hectare and agronomic benefits of biofertilizers, such as Biological Nitrogen Fixation, including estimates of costs, agronomic performance, and environmental impacts.
The types of available substitutes were analyzed through a descriptive and exploratory approach, based on the definitions and classifications of Embrapa (2026). The methodology mapped the main alternative inputs and examined their technical, agronomic, and economic characteristics, using secondary data from official documents and specialized literature.
Market trends for biofertilizers were evaluated by a descriptive and applied approach, based on data from Embrapa (2026) and records from the Ministry of Agriculture. The methodology tracked the historical evolution of revenue, cultivated area with biological technologies, and the number of official bio-input registrations, comparing biological and traditional chemical inputs and evaluating the effects of legislation and regulatory requirements.
Public policies were examined through a descriptive and applied approach, based on federal legislation, decrees, bills, and technical documents from Embrapa (2026). The analysis mapped the regulatory framework and assessed its effects on research, innovation, technological adoption, and competitive performance, considering the role of Embrapa and environmental, agricultural, and sanitary regulations.
Information Gathering on Supplier Bargaining Power
The concentration of suppliers was analyzed through documentary and descriptive analysis, based on data from the Ministry of Development, Industry and Commerce [MDIC] (2025) on Brazilian fertilizer imports. This allowed for the observation of the distribution of trade flows by country of origin and the assessment of the degree of concentration of international suppliers, with the interpretation complemented by Ogino and Gasques (IPEA, 2023) and geopolitical factors.
The volatility of international prices and geopolitical factors were studied through a documentary and descriptive approach, based on data from Itaú BBA (2026). The methodology identified price oscillations, supply shocks, and logistical risks associated with geopolitical events, evaluating their effects on production costs and external dependence, interpreted based on Porter’s Five Forces model.
The cost of change was analyzed through a qualitative and documentary approach, considering supply risk, operational impacts, and technical differentiation between products. The research assessed how global disruptions, logistical constraints, and geopolitical tensions affected the ability to substitute suppliers in the short term, examining the effects on fertilizer availability and productive performance, and incorporating the perception of financial, operational, and technical costs.
The capacity for integration (verticalization) was studied through a qualitative and documentary approach, based on institutional reports, government documents, and corporate disclosures. The methodology examined the sector’s productive structure, considering operational scale, companies’ global presence, and access to mineral reserves, with interpretation aligned to Porter’s Five Forces model.
Information gathering on buyer bargaining power
The concentration of buyers was analyzed by a descriptive approach based on secondary data from the National Supply Company [Conab] (2026), Embrapa (2026), and Itaú BBA (2026). This information characterized national demand and the acquisition strategies of large buyers, being integrated into Porter’s model to assess how demand concentration, purchase volume, and the ability to alter import patterns strengthened buyers’ bargaining power.
Price sensitivity was evaluated through a descriptive approach based on secondary data from Itaú BBA (2026). These data allowed us to identify how geopolitical shocks affected the costs of imported fertilizers. The methodology interpreted this information in light of Porter (1980), examining the effects of increases in oil, natural gas, and freight on domestic volatility and buyer behavior.
The cost of change was analyzed through a descriptive approach based on secondary data from technical documents and international reports. These materials identified the financial, operational, technical, and strategic components of supplier substitution, interpreted based on Porter’s theory (1980). The methodology mapped how technical dependence created ties and how geopolitical shocks (Itaú BBA, 2026) affected the global flow of nitrogenous fertilizers, increasing logistical costs, risk premiums, and exchange rate variation, integrating this information into Porter’s model.
Public policies were studied through a descriptive approach based on secondary data from federal legislation, official documents, and technical reports. The methodology mapped the regulatory framework and interpreted its effects based on Porter (1980), assessing how increased transportation costs and reduced contractual flexibility limited buyers’ bargaining power. Information from the National Fertilizer Plan (MAPA, 2023) was incorporated to analyze policies for reducing external dependence.
Information gathering on competitor rivalry
The analysis of the market structure was based on data from the National Fertilizer Plan (MAPA, 2023), which described the dependence on imported inputs and the limitation of national production. To understand the organization of the blending stage and its competitiveness, the optimal location model for blenders by Bastiani et al. (2024) was used, which identified the spatial distribution of these plants as a function of agricultural poles and logistics corridors. These sources allowed us to evaluate how external dependence, the dispersion of blenders, and logistics costs structured the competitive dynamics.
The demand growth was analyzed using data from the Sectoral Survey of the National Association for Fertilizer Diffusion [ANDA] (2026) and Conab (2026). ANDA (2026) provided the empirical basis for characterizing market expansion, and Conab (2026) detailed the demand concentration in specific agricultural hubs. The interpretation followed Porter’s (1980) theoretical framework, integrating insights from Bastiani et al. (2024) on how the logistics and location of blending plants affected costs and service capacity.
Product differentiation was evaluated based on information from Embrapa (2025) and the International Fertilizer Industry Association [IFA] (2015). These sources indicated that the choice of nutrient source depended on standardized chemical and physical properties, and agronomic efficiency was associated with management, technical assistance, and logistics. The interpretation followed Porter’s (1980) theoretical framework, integrating the study by Bastiani et al. (2024) on the influence of logistics and proximity to agricultural hubs on costs and service capacity.
Competitive strategies were analyzed using the theoretical framework of Carlton and Perloff (2015), complemented by data from the ANDA Sectoral Survey (2026). Evidence from the Center for Advanced Studies in Applied Economics [CEPEA] (2023) was incorporated to assess the impact of geopolitical shocks on prices and margins. The influence of logistics was examined based on the National Fertilizers Plan (MAPA, 2023) and the location model for blenders by Bastiani et al. (2024), allowing for an analysis of how price and logistics structured rivalry.
3. Results and Discussion
Information Survey of Entry Barriers
Economies of scale
The analysis of entry barriers in the fertilizer sector considered economies of scale, evaluated by the Minimum Efficient Scale (MES). Based on a total demand of 45.8 million tons in 2021, according to the National Association for Fertilizer Diffusion (ANDA, 2025), and applying the 5% rule, the MES was calculated at approximately 2.9 million tons annually. This minimum production level indicated that new entrants require significant productive and logistical capacity to operate efficiently and competitively in the Brazilian market.
Legal barriers
Laws and regulations acted as barriers to entry in the fertilizer sector, increasing costs and requiring prior organizational capabilities, according to Porter (1980). Law No. 6.894/1980, by structuring the official control of production and commercialization, imposed high investments in registration, technical standards, and laboratory infrastructure. Law No. 14.515/2022 deepened this framework by making self-control in agricultural defense mandatory, requiring compliance and governance systems. For the bio-inputs segment, Law No. 15.070/2024 created a comprehensive regulatory framework that, although it stimulated innovation, required full compliance from the outset, increasing initial costs and hindering the gradual entry of smaller companies. Law No. 13.703/2018, which regulates minimum freight rates for road transport, indirectly reinforced barriers by raising the sector’s minimum operational costs, impacting new entrants without scale or consolidated contracts more heavily.
Access to raw materials
Brazil’s dependence on raw materials for fertilizers was assessed through secondary data from the Ministry of Development, Industry, Trade, and Services (MDIC, 2025). Imports of chemical fertilizers, excluding raw ones, reached 15.5 billion dollars in 2025, totaling 45.5 million tons. The historical series between 2019 and 2025 revealed a significant increase in imported volume, from 31.1 million tons in 2019 to 45.5 million in 2025, indicating the expansion of cultivated area and the technological intensification of agriculture. The prices presented in Table 2 showed a highly volatile market, requiring financial capacity to absorb abrupt variations. The combination of price volatility and the need for intensive capital configured substantial financial barriers, limiting the entry of new competitors and favoring companies with greater economic robustness.
Table 2. Historical Series of Brazilian imports of chemical fertilizers, except raw fertilizers.
| Period | FOB Value US$ (Billions) | Millions of Tons | US$ FOB Price / Kg |
|---|---|---|---|
| 2019 | 9.121.411.232 | 31.1 | 0.29 |
| 2020 | 8.008.734.575 | 34.2 | 0.23 |
| 2021 | 15.135.996.824 | 41.6 | 0.36 |
| 2022 | 24.702.864.236 | 38.1 | 0.65 |
| 2023 | 14.610.711.001 | 40.9 | 0.36 |
| 2024 | 13.549.805.865 | 44.3 | 0.31 |
| 2025 | 15.464.518.411 | 45.5 | 0.34 |
Source: MDIC (2025)
Logistics and Infrastructure
Logistics proved to be a strategic element for the competitiveness of the fertilizer sector, given the strong external dependence (Porter, 1980). The National Fertilizer Plan (MAPA, 2023) highlighted that states with better rail access to ports concentrated the largest imported volumes, evidencing the importance of this mode in cost reduction. Despite advances, structural bottlenecks persisted, such as the strong dependence on road transport, the high cost of cabotage, low port efficiency, and underutilization of railways, which increased the systemic costs of the supply chain and created barriers to entry. Data from the National Waterway Transport Agency (ANTAQ, 2026) reinforced this concentration, indicating that most fertilizer port operations were concentrated in a few ports, such as Paranaguá, generating seasonal congestion and increasing costs.
Information Survey of Substitute Goods Barriers
Cost and performance of alternatives
The research assessed the economic and agronomic viability of alternatives to conventional fertilizers. The report by the Rocky Mountain Institute and Instituto E+ (RMI; Instituto E+, 2023) indicated that domestic green ammonia production could reach costs close to those of gray and blue ammonia, around US$ 800 per ton in hybrid systems, driven by the high price of natural gas and Brazil’s potential in renewable energy. In parallel, biofertilizers and other bioinputs reinforced competitive pressure by offering lower costs per hectare and additional agronomic benefits, such as improved soil microbiota and reduced emissions. Biological Nitrogen Fixation (BNF), a technology consolidated by Embrapa (2026), demonstrated that in soybeans, inoculation supplies the entire nitrogen demand, generating savings of R$ 898.00/ha compared to urea. These results strengthened the threat of substitutes, expanding producers’ alternatives.
Types of available substitutes
Based on Embrapa’s definitions (2026), the main alternative inputs to fertilizers were highlighted. Organomineral fertilizers were considered hybrid solutions, promoting efficiency gains, but not full substitutes. Remineralizers were identified as potential substitutes, but their effectiveness and short-term substitution capacity were limited by the absence of conclusive results. Bioinputs, classified into biological, microbiological, biochemical formulated products, and plant extracts, represented the most direct substitutes, significantly reducing the dependence on chemical fertilizers in certain crops. Thus, bioinputs exerted greater competitive pressure, while organominerals and remineralizers acted in a complementary or limited manner.
Market trends for biofertilizers
The bioproducts market in Brazil has shown a consistent expansion trend, reaching an annual revenue close to one billion reais between 2020 and 2021 (Embrapa, 2026). This growth was driven by the demand for more sustainable production systems and regulatory requirements, such as legislation for organic farming. Approximately 40 million hectares were cultivated with plant growth-promoting bacteria, and registrations of products classified as Bio and Bio/Organic grew the most between 2000 and 2022, surpassing traditional chemical inputs. This trend indicated the strengthening of bioproducts as substitutes for conventional fertilizers, intensifying competitive pressure on mineral fertilizers (Porter, 1980).
Public policies
Public policies influenced the threat of substitutes in the fertilizer sector. Decree No. 10.375/2020, which established the National Bio-inputs Program, promoted regulatory updates, research incentives, and the stimulation of bio-input use (Embrapa, 2026). Embrapa’s performance was crucial in the agronomic validation and formulation of these policies. The development of biological products depended on standards that covered everything from the collection of biological material to commercial registration. Although regulation maintained entry barriers, these initiatives tended to reduce them by strengthening the technological performance of bio-inputs and expanding their adoption, increasing competitive pressure on traditional mineral fertilizers (Porter, 1980).
Information Gathering on Supplier Bargaining Power
Supplier concentration
The distribution of Brazilian fertilizer imports by country of origin showed a strong concentration in a few strategic suppliers (MDIC, 2025). China and Russia occupied central positions in this trade flow, according to Table 4. China supplied approximately 11.98 billion kg (US$ 2.90 billion in FOB value), while Russia exported about 11.08 billion kg (US$ 4.00 billion). Together, these nations accounted for over 23 billion kg of imported fertilizers, reinforcing Brazil’s dependence on relevant markets subject to geopolitical risks. Russia stood out as the largest supplier in value, reflecting its leadership in the production of potassium and NPK (MDIC, 2025). The conflict between Russia and Ukraine, which began in 2023, highlighted Brazil’s vulnerability. This concentration of suppliers and exposure to external shocks represented relevant risks to the competitiveness of agribusiness (Ogino and Gasques, 2023).
Table 4. Partner countries in Brazilian imports of chemical fertilizers, except crude fertilizers in 2025.
| Country | FOB Value US$ (Billions) | Millions of Tons |
|---|---|---|
| China | 2.904.281.424 | 11.982.459.667 |
| RUSSIA | 4.002.993.065 | 11.086.718.752 |
| Canada | 1.586.223.214 | 5.164.558.373 |
| Morocco | 1.157.232.767 | 2.142.444.912 |
| Egypt | 417.989.453 | 1.819.303.658 |
| Nigeria | 709.632.615 | 1.802.907.486 |
Source: MDIC (2025)
International price volatility and geopolitical factors
Itaú BBA consultancy (2026) explained that the intensification of the conflict between the US and Iran generated a shock in global markets, increasing geopolitical risk and price volatility, especially in the Middle East. The instability impacted the Strait of Hormuz, increasing the price of oil and, consequently, logistical and operational costs in Brazilian agribusiness. For the fertilizer market, the withdrawal of supply by Middle Eastern suppliers and the rise in natural gas prices led to significant increases in urea prices. Considering that Brazil imports 80% to 85% of its fertilizers, the country’s high exposure to external supply and price shocks was observed. This volatility significantly increased suppliers’ bargaining power, reducing cost predictability and negatively impacting the sector’s competitiveness.
Cost of change
The switching costs in the Brazilian fertilizer market, understood as financial, operational, technical, and strategic, directly influenced the bargaining power of suppliers (Porter, 1980). The global fertilizer crisis between 2023 and 2024 highlighted the vulnerability of supply chains, with logistical disruptions resulting in delays in input delivery and compromising agricultural productivity (IFDC, 2026). Substituting suppliers did not guarantee immediate access to inputs, especially during periods of supply restriction. Thus, the switching cost surpassed the financial aspect, incorporating operational risks and potential production losses, which reduced buyers’ flexibility and increased their dependence on consolidated suppliers. The variation in agronomic efficiency between fertilizers, due to differences in formulation and solubility (IFA, 2015), also increased the perception of risk associated with changing suppliers, amplifying switching costs and reinforcing dependence in the sector.
Integration capacity (verticalization)
The Brazilian fertilizer market showed high productive concentration, especially in the production of strategic raw materials such as phosphate and intermediate inputs (MAPA, 2023). The national productive structure was dominated by a few players, notably Mosaic Fertilizantes, which led domestic production with approximately 52% of the total. This pattern was replicated in the intermediate input markets, such as sulfuric acid, controlled by a limited number of companies. This scenario reinforced the sector’s structural dependence on large vertically integrated companies, which controlled critical stages of the production chain and operated on a global scale. Mosaic, for example, operated in an integrated manner throughout the entire value chain, encompassing mining, production, and distribution (SEC, 2023), which provided cost advantages and operational efficiency. This verticalization contributed to raising entry barriers and reducing the bargaining power of suppliers, reinforcing the competitive position of established companies (Porter, 1980).
Information gathering on buyer bargaining power
Buyer concentration
Soybean and corn crops concentrated the largest share of national agricultural production and, consequently, the highest demand for fertilizers in Brazil (Conab, 2026; Embrapa, 2026). This high productive concentration in a few specific crops and regions, such as the Center-West, indicated that the fertilizer market was influenced by large rural producers, agricultural cooperatives, and large-scale agro-industrial groups. The purchasing behavior of these agents reinforced their bargaining power. The withdrawal of offers by Middle Eastern suppliers and the rise in urea prices led Brazilian buyers to seek alternative, lower-cost sources, such as ammonium sulfate (Itaú BBA, 2026). This movement highlighted that the main buyers not only concentrated a large part of the demand but also influenced the composition of imports and price dynamics, reinforcing their negotiation power with suppliers.
Price sensitivity
Price sensitivity was one of the main determinants of buyer bargaining power (Porter, 1980). The Itaú BBA report (2026) presented evidence of how the escalation of the conflict between the US and Iran raised the price of oil, natural gas, and maritime freight, directly pressuring the cost of imported fertilizers. As Brazil depended on 80% to 85% of imports, any geopolitical shock quickly translated into domestic price volatility, increasing the rural producer’s sensitivity. Buyers adjusted their behavior according to risk perception and expectations of future prices, adopting a cautious stance and adjusting purchase timing. This scenario confirmed the high price sensitivity in the sector and demonstrated how geopolitical factors amplified this competitive force.
Cost of change
In the Brazilian fertilizer market, switching costs associated with supplier substitution directly influenced buyers’ bargaining power (Porter, 1980). Given the high dependence on imports, geopolitical instability, and the need for agronomic predictability (MAPA, 2023), these costs tended to be moderate to high, restricting negotiation capacity. Nutrient use efficiency depended on the appropriate choice of source, dose, timing, and application location (IFA, 2015), creating technical dependence between producers and suppliers. The strategic dimension of these costs was amplified by the international context, where import-dependent countries, like Brazil, faced greater vulnerability, as supplier substitution could result in uncertainty regarding availability, delivery times, and price stability (IFDC, 2026). Thus, high switching costs reduced buyers’ bargaining power.
Public policies
Public policies directly influenced the bargaining power of buyers. Law No. 13.703/2018, which established the National Policy for Minimum Prices in Road Freight Transport, increased the logistical costs associated with the internal transport of fertilizers, reducing the negotiation flexibility of buyers (CNA, 2018). In contrast, the National Fertilizer Plan (PNF), coordinated by MAPA (2023), sought to reduce external dependence and stimulate national production, providing incentives for the installation of new industrial plants and improvement of logistical infrastructure. From Porter’s (1980) perspective, the PNF had the potential to increase buyers’ bargaining power in the long term by expanding the number of suppliers and reducing logistical costs. Thus, public policies played an ambivalent role, restricting bargaining power in the short term, but strengthening it by promoting greater productive autonomy and market stability.
Information gathering on competitor rivalry
Market structure
The structure of the Brazilian fertilizer market was marked by a strong dependence on external inputs, with limited national production unable to meet internal demand (MAPA, 2023). This dependence shaped the value chain and influenced competitive dynamics, as international fluctuations in supply, prices, and logistics affected all companies. After importation, the blending and formulation stage assumed a central role. Bastiani et al. (2024) showed that blenders were strategically located close to agricultural hubs and logistics corridors to reduce transportation costs and meet demand. This geographical dispersion reinforced the fragmentation of agents and contributed to a more intense competitive environment. Logistics constituted a structuring element of rivalry, with logistical efficiency becoming a relevant competitive advantage due to the need to transport imported fertilizers over long distances. The market structure laid the groundwork for high rivalry among competitors.
Demand Growth
ANDA’s Sectoral Survey (2026) showed that Brazilian demand for fertilizers maintained a growth trajectory, with deliveries to final consumption increasing from 45.6 million tons in 2024 to 49.1 million in 2025. This growth reflected the technological intensification of agriculture, the expansion of cultivated areas, and the high dependence on inputs to sustain the productivity of major crops. Conab (2026) showed that the demand growth was concentrated in specific regions, intensifying local competition among blenders, distributors, and integrated groups. Competition occurred mainly on price, logistical efficiency, and service capacity, resulting in high rivalry, even in scenarios of growing demand (Porter, 1980; Bastiani et al., 2024).
Product differentiation
Embrapa (2025) highlighted that mineral fertilizers in Brazil, such as nitrogenous, phosphatic, and potassic, presented high chemical and functional standardization, being marketed as commodities. The choice of nutrient source was based on standardized chemical characteristics, not on differences between brands. The International Fertilizer Industry Association (IFA, 2015) reinforced that agronomic efficiency depended on operational factors and physical product attributes, in addition to the quality of technical assistance and distribution logistics. Differentiation in the sector occurred mainly in services and complementary attributes, while the chemical product remained homogeneous. Markets with little differentiated products tend to exhibit more intense rivalry, with competition shifting to price, commercial conditions, and operational efficiency (Porter, 1980). Low differentiation reinforced this competitive mechanism, with companies competing for market share through lower logistical costs and aggressive pricing strategies (Bastiani et al., 2024).
Competitive Strategies
In markets for homogeneous products, competition occurred predominantly via price, according to Carlton and Perloff (2015). In the Brazilian fertilizer market, data from ANDA (2026) evidenced intense international volatility, with global price fluctuations rapidly transmitted to the domestic market. Rural producers adjusted their purchases according to price movements, reinforcing the centrality of price as the main competitive variable. The Center for Advanced Studies in Applied Economics (CEPEA, 2023) demonstrated that geopolitical shocks directly affected fertilizer prices, pressuring margins and intensifying competition among companies. Logistics constituted a central competitive strategy due to the high dependence on imports and the complexity of internal distribution (MAPA, 2023). The location of blending plants, proximity to ports, and transportation efficiency directly influenced the total product cost, making the logistics structure decisive for competitiveness (Bastiani et al., 2024). The ability to ensure availability, minimize transportation costs, and mitigate logistical bottlenecks became a relevant competitive differential, intensifying rivalry.
The analysis of Porter’s Five Forces applied to the Brazilian fertilizer sector revealed a complex competitive structure, characterized by strong external dependence, rigorous regulatory requirements, emerging technological pressures, and intense rivalry. Entry barriers proved to be high, combining economies of scale, significant regulatory costs, and the need for substantial infrastructure investments. The threat of substitute goods grew consistently, driven by technological advancements and public policies that strengthened alternatives such as green ammonia and Biological Nitrogen Fixation. Supplier bargaining power remained high due to strong international concentration and exposure to geopolitical shocks, while buyer bargaining power was relevant but partially limited by switching costs and supply disruption risks. Rivalry among competitors was intense, sustained by low differentiation of mineral fertilizers, heavy import dependence, and competition based on price and logistical efficiency. In summary, the Brazilian fertilizer sector presented high attractiveness for incumbents and substantial barriers for new entrants, configuring a mature, concentrated, and highly sensitive industry to external factors.
4. Conclusion
This study assessed the attractiveness of the Brazilian fertilizer sector using Porter’s Five Forces model. It was found that entry barriers were high, driven by significant economies of scale, substantial regulatory costs, the need for infrastructure investments, and dependence on imported raw materials. The threat of substitute goods, such as green ammonia and Biological Nitrogen Fixation, grew consistently, strengthened by technological advancements and public policies. Supplier bargaining power remained high, given strong international concentration and exposure to geopolitical shocks that generated price volatility and switching costs. In contrast, buyer bargaining power, although relevant due to demand concentration, was partially limited by switching costs and supply shortage risks. Rivalry among competitors proved intense, characterized by low product differentiation, heavy reliance on imports, and competition based on price and logistical efficiency. In summary, the sector presented high attractiveness for established companies and substantial barriers for new entrants, configuring a mature industry sensitive to external factors.
The main contribution of this work lies in offering strategic subsidies for managers and organizations in the fertilizer supply chain, assisting in the formulation of adaptive competitive strategies. However, a limitation of the study was the aggregated approximation of the Minimum Efficient Volume, which did not capture the technological differences between specific segments of the chain. For future studies, it is suggested to deepen the analysis on supplier diversification, the stimulus to national production, and investments in nutritional efficiency technologies and the development of alternatives such as bioinputs, aiming to mitigate the sector’s vulnerability and strengthen its resilience.
Bibliographic References
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Article originating from the Course Conclusion Work of the Specialization in Business Management of the MBA USP/Esalq
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