Brazil is a country that works, despite the challenges. We have achieved the position of one of the most important countries in the world's food and renewable energy production, and there is still potential for more. We, who are in agribusiness, are proud.

On the other hand, we keep secret the impression that things work out "almost unintentionally", as there is no integrated long-term planning, involving government and the private sector, with defined investments for both and clear goals to be pursued. A little while ago, we reopened the National Fertilizer Plan, so we have a plan? which was rescued mainly to face the imminent challenge presented by the war in Ukraine. Politicians, thinkers and entrepreneurs quickly concluded that, if there is a lack of fertilizers (and diesel), there will be no super harvests, nor any super Gross Domestic Product.

The war in Ukraine represented a strong risk of causing chaos in the Brazilian economy. But the risk has passed and now we have a plan to execute, without the stimulus that the war would bring on high fertilizer prices and which would end up more easily justifying the investments necessary to develop domestic production.

Will there be government and private effort without stimulating prices? The answer must be positive regarding nitrogen. We will resume investments in a robust manner, for the same reason that we abandoned our factories in the past: the supply of natural gas, previously imported and expensive, now appears abundant, with the start of pre-salt exploration. Urea and ammonium nitrate solve much of the challenge of nourishing our soils and crops, and sugar cane is grateful, which represents less than 15% of the domestic fertilizer market.

Now, we're not supposed to be good at everything. There are no known reserves of phosphorus and potassium in the country that can provide independence, considering soybeans, corn, sugarcane and other crops. And, on the other hand, there are abundant reserves of phosphates in North Africa and potassium in Eastern Europe and Canada that would serve us for generations, longer than a long-term plan usually lasts in Brazil.

However, specifically for sugar cane, the scenario is not bad. There are already biomethane industries in operation, attached to the sugar and ethanol industries, helping to reduce fuel costs, replacing the use of diesel and to provide robustness to revenue, in the form of thermal and electrical energy.

Furthermore, the biodigestion process generates waste rich in phosphorus and potassium, which can be incorporated into the soil, satisfying much of the demand for these nutrients. It does not solve the country's problem, but it will help reduce Brazilian demand for fertilizers, indirectly contributing to an expected, but not certain, price reduction. To reinforce optimism, our industry has already reduced the demand for potash in recent decades, with the efficient reuse of vinasse in fertigation operations. What about agrochemicals? This is another vast field of hope and efficient solutions, but also of bureaucracy, delay and risks.

While, on the one hand, in fertilizers we are preferred customers of an "interesting" portfolio of countries, which, due to their diversity, helps to dilute geopolitical risk, the main ones are Russia, Belarus, China, Morocco, Middle Eastern countries, Canada, Bolivia and others. In agrochemicals, we depend very sensitively on China, which concentrates a large part of the mineral resources and raw materials necessary for the production and synthesis of the majority of generic (or post-patent) active ingredients consumed by Brazil, the United States, Australia, the European Union, India and other relevant customers. India is quickly entering the game on the supplier side, but the geopolitical risk is still relevant.

In general, companies that supply agrochemicals, whether domestic or multinational, manufacture only part of the portfolio of products they offer. A relevant part, around 50% in value in the case of sugar cane, is purchased from Chinese and Indian manufacturers and delivered to local distribution chains in client countries.

Here, unlike nitrogen fertilizers, there is no Brazilian plan, nor government or private stimulus. Investing in the domestic production of generic assets, but remaining dependent on Chinese raw materials is not viable. The relationship worsens when considering local barriers related to unfair competition from smuggled and counterfeit products, demanding environmental legislation and, obviously, the cost of financial resources needed to build new factories or modernize existing ones.

In a way, China and India have already taken risks related to environmental exposure and worker safety that we cannot bear to take here. Our environmental and labor legislation is more demanding and developed over a longer period of time. Thus, these countries achieved a level of competitiveness that was difficult to achieve.

In the case of patented assets, the other 50% of the story, a large part of the risks mentioned are repeated, which discourage manufacturers from investing in increasing local manufacturing capacity, but others are added, such as low speed and lack of political will. in the approval of new molecules, which are more efficient and safer in relation to the environment, food safety and user safety.

The scenario, however, carries some optimistic biases. Less than five harvests ago, renowned manufacturers of chemical pesticides presented us with a line of products with very positive externalities, from the proposed agricultural yield to the natural interaction with the environment, worker safety and food security: biological pesticides. Received with skepticism at the beginning, currently "bioinputs" are conquering consumers' portfolios, with real delivery of results and competitive equivalent cost, the basics necessary to integrate the agricultural management strategy of the most demanding buyers.

There are still challenges to be overcome: manufacturers have multiplied, there are uncertainties regarding the robustness of manufacturing processes and the quality of the final product and raw materials used, and there is the belief that it is possible to produce bioinputs "at home", with efficiency and without unexpected biological risks. Even so, it is a segment that is growing very quickly and already represents around 7% of the sugarcane market, with real chances of contributing to reducing our dependence on other countries.

In conclusion, to remain part of the important team of global food and energy supplying countries, we will have to face this series of risks in a prudent, planned, organized and collaborative way. We won't do it without honest government participation. We won't do it without responsible private participation. We may end up succeeding, despite the challenges, almost unintentionally.