Russia-Ukraine war: What’s behind Brazil’s ‘neutral’ position?

Sao Paulo, Brazil – Wearing her trademark Nigerian headtie and colourful dress, Dr Ngozi Okonjo-Iweala, director general of the World Trade Organization, sat facing a beaming Jair Bolsonaro, Brazil’s president, in the capital Brasilia this week. On paper, the pair could not be more different.

Okonjo-Iweala, the first female director general of the WTO, sits on the board of several global liberal institutions and think tanks, including one that promotes coronavirus vaccines. She is also an advocate for environmental sustainability.

President Bolsonaro, meanwhile, is a far-right populist with a history of disparaging remarks against minorities, who looks up to nationalist leaders like Hungary’s Victor Orban, has boasted of not taking a COVID-19 jab and is a climate change sceptic.

Yet their cordial meeting on global food security highlights some of the challenges – and perhaps even opportunities – that Brazil faces in light of the war in Ukraine that could have wider repercussions for the world economy.

“We need those of our members who are agricultural powerhouses to step up and put more food in the international market,” Okonjo-Iweala told reporters after the talks, referring to Brazil. “The President and the Minister have asked us to raise this fertilizer issue to see what can be done.”

The meeting also underscored Brazil’s pragmatic, at times ambivalent, stance towards the conflict – a position that experts say is motivated by national interests, diplomatic traditions and electoral concerns for Bolsonaro, who is seeking re-election later this year.

“Russia, after the collapse of the Soviet Union, has become a significant partner for Brazil,” said Mauricio Santoro, a professor of international relations at Rio de Janeiro State University. “What is most relevant in this trade between Brazil and Russia is the purchases that Brazil makes of Russian fertilizers.”

Agricultural needs

Brazil is the world’s largest producer and exporter of soybeans, mostly used for animal feed. Last year, the country exported a record 86 million tonnes of the grain, according to the Ministry of the Economy. More than two-thirds of exports went to China. Spain and the Netherlands were the next largest buyers but with volumes dwarfed by Beijing.

However, Brazil imports 85 percent of the fertilizers it needs to produce soy and other crops such as corn, sugarcane and cotton – and Russia accounts for 23 percent of a total of 40 million tonnes of imports, according to Brazil’s National Association for the Diffusion of Fertilizers.

So far, Russian fertilizers have not been sanctioned and continue to arrive in Brazil, according to recent analysis by consultancy StoneX published this week in Brazil’s top business newspaper, Valor Economico.

But potential logistics bottlenecks and payment problems have raised fears of supply shortages and subsequent hikes to already high prices for the second half of the year when Brazil will plant its 2022-2023 crop. Rising prices for fertilizers, as well as fuel, will challenge many agricultural expansion opportunities as producers grapple with lower margins.

Bolsonaro, who counts much of Brazil’s powerful agribusiness sector among his most loyal supporters, has been outspoken on the matter and visited Russia and President Vladimir Putin shortly before the war began, a trip that even some of his own ministers have criticised.

“For us, the fertilizer issue is sacred,” he said days after the Russian invasion began on February 24. “We are not going to take sides, we are going to continue with neutrality and help in whatever way possible in search of a solution.”

Diplomatic tradition

Experts told Al Jazeera that Bolsonaro’s stance on the conflict is broadly in line with Brazilian diplomatic tradition, however.

“One could read into Brazil’s traditional non-interventionist stance on international affairs … This is a country that will not very easily take a side,” said Elena Lazarou, an associate fellow in the Americas programme at international affairs think tank Chatham House.

Under former left-leaning Presidents Luiz Inacio Lula da Silva and Dilma Rousseff, “Brazil was certainly not hostile to Russia … It was the heyday of the BRICS,” added Lazarou, referring to the economic bloc of emerging powers: Brazil, Russia, India, China and South Africa.

But the response to the war in Ukraine within Brazil’s government has been far from coherent, with Vice President General Hamilton Mourao advocating Western military force in support of Ukraine and comparing Putin to Adolf Hitler. Bolsonaro swiftly and publicly criticised Mourao, who is expected to run for the Senate in elections later this year, for his remarks.

While Brazil has condemned the invasion at the United Nations, it also this week supported Putin’s presence at the G20 summit in November in Bali amid pressure by the United States and its allies to bar the Russian leader from attending.

Last week, Russia reached out to Brazil to ask for support at the International Monetary Fund, the World Bank and the G20 to help it counter sanctions. “Russia is resuscitating the BRICS out of necessity, in an effort to have some allies … to save itself from isolation,” said Lazarou.

Price increases

Because of the war, the IMF this week reduced its expectation on global gross domestic product growth, but increased it for Brazil on account of commodity price hikes, albeit from 0.3 to 0.8 percent.

Inflation in Brazil was already high before the war, with growing hunger and poverty presenting problems for Bolsonaro’s October re-election. Lula, the two-time former president, is expected to win, according to recent polls.

“The biggest problem of the direct reflection of the war in Ukraine is the increase in the price of oil,” said Mario Sergio Lima, senior Brazil analyst for Medley Advisors, a research service.

“This has a very strong impact in Brazil, not only on the fuel issue, but you also have what we call the secondary effect of the increase because most of food in Brazil for example is transported via road transport,” he told Al Jazeera.

“So when you have an increase in the price of fuel, you also have an increase in freight prices, which will impact food prices. Wheat globally also rose sharply – and Brazil imports a lot of wheat,” Lima added.

“With this price increase, according to polls, people blame the president. And so the factor today that most plays against Bolsonaro’s election is the price increases.”