The War in Iran: Resilience and Challenges for Latin America

As the global economy grapples with the sharpest energy price hikes seen in a generation, the ripples of the conflict in the Middle East and the war in Iran are being felt deeply across the globe. In this episode of Sustainable LatAm, hosts Andrew, Alberto, and Julian dissect how the Latin American agroindustrial and economic sectors are shifting to meet these unprecedented geopolitical tensions.

While Latin America remains a robust global breadbasket—responsible for 19% of global food production but only 8% of global food consumption—it faces severe domestic vulnerabilities. Our hosts break down the indirect impacts hitting the region: severe supply chain disruptions, soaring freight costs, currency devaluations, and the critical strain on fertilizer imports that threatens competitive regional production. Tune in as we analyze how new regional governments must walk a diplomatic tightrope between the United States and China, integrate new technologies like AI to boost farm efficiency, and brace for looming inflationary pressures and social unrest.

Production: Sustainable LatAm

Presenters 

• Andrew Thompson - International journalist & political-risk analyst with deep LatAm coverage (OBG, EIU, Latin News; ex-Head BBC Learning English).
• Alberto Souviron - International journalist and digital comms leader for EM investors; ex BBC/Newsweek/Lloyd’s Register. 
• Julian Seydoux - AI-driven finance entrepreneur (FirmView AI, Fast Audit AI); ex-Moody’s/Consilium; cross-border EM & LatAm focus. 

Transcript

Opening

Andrew 0:00

It seems that the economy is responding to the sharpest increase in energy prices for a generation in a fairly resilient manner.

Alberto 0:08

There is a huge element that is going to affect the competitiveness of Latin America. Also to supply the rest of the world in terms of food. I agree with Julian. I don't think Latin America has is going to have a problem of shortage of food. But in order to export, there is going to have an impact. And also the inflationary problems that are going to come.

Julian 0:28

The price of production will go up because of fertilizers becoming more scarce or more difficult to obtain since there's disruption of supply chain.

Introduction

Andrew 1:06

Hello everyone. I'm here with uh Alberto, who like me is a journalist, trying to understand what's going on, and with Julian, who's an economic analyst, who's also trying to understand what's going on. And our big subject today is the response of the Latin American agro-industrial sector uh to the crisis posed by the conflict in the Middle East and and the war in Iran. So what we'll be looking at is how does this change things for Latin America? Are there opportunities, are the threats, uh what's the way forward? And uh having introduced that, I really wondered whether Alberto or Julian would like to start off saying how you see the issue.

Alberto 1:59

Hi Andrew, hi Julian. Uh first of all, thank you for telling me the Alberto, not just Alberto. So that that's a good thing.

Andrew 2:09

Special Alberto.

Alberto 2:10

Special Alberto. But no, uh in in a more serious thing.

The Fertilizer and Crude Oil Squeeze

Alberto 2:17

Definitely the the the the war on Iran is going to have and it's having an impact on the agro industry and especially in the export area in Latin America. But from what I read uh and by seeing all the reports coming from Bloomberg, uh El País, uh Financial Times, but as well as organizations like the World Bank or D AMF, this impact is not a direct impact, it's an indirect impact. And it's clear to see when you see certain graphics uh are around, and I can see here the biggest impact has been obviously in what is called the insumes for for for the agro industry, fertilizers, uh crude oil, brand crude oil, and natural gas, uh which is affecting mostly Europe rather than Latin America. The most impact is in fertilizers for the agro industry and also uh brand and crude oil, because those are insumes for the productions of soybean production, corn production and all other agri business where Brazil and Argentina are big uh big powers, big gamers, uh big players in this game. But if we look at Brazil, uh the closure of the Armour Strait has a direct impact in fertilizers, and Brazil imports around 43% of its imports of fertilizers coming through the Armour Strait. So that's an impact in that. And from what we can see is that is going to have an impact in the in the short term more cost for the production. And in the medium and long term, it is affecting competitiveness for the agro industry in Latin America because everything is going to be more expensive, prices are going up for production, and obviously we have to see if the producers can kept the same level of production or is going to reduce because the costs are going up. That's what I see in general, especially when you're seeing the the latest report of the World Bank regarding MT it call, I will tell you immediately the name, is a commodity market outlook in April 2026, has been showing that. There is an increase, but compared to the war in Ukraine, this has been uh a lesser impact when we're seeing the graphics. I don't know, Julian, what is your view on that?

Julian 5:33

Um

Economic Strain: Winners, Losers, and Local Devaluations

Julian 5:39

it's it's uh it's pretty uh it's pretty bad for everyone. So actually you can we can look at the um you know there are some gains for of course for the energy producing countries so you know uh Venezuela is uh is uh if it's restarts it's uh it's uh you know should be a winner of this. Uh to some extent Colombia, uh, Brazil, Ecuador, Argentina should be also an exporter of uh we should get some gains on on the prices. Uh but for the rest, uh you know, for those who import energy and oil in particular, it's uh it's a pain. And here we we look in particular at Chile and Peru, so uh which is an interesting one because you have recent elections uh in those countries. So so that those are going to be you know uh facing issues in terms of transportation, electricity generation, uh logistics, uh and general inflation across uh across everything. Um what will happen there is that well I mean that uh and what people are already sent in there is that they are uh is that when you have inflation and real assets tend to go up and that generally means property, but existing properties because construction will be impacted to with the with the cost of of uh of inflation. Uh so fuel, food inflation, uh probably some uh depreciation in currency, uh possibly higher interest rates. Uh just you know this may lead to social unrest everywhere. We we currently see it to some extent in in in Bolivia with uh block chaos everywhere. Uh so these are these are some of the some of the some of the impact for for the agriculture, you know, the it's it is a the there are two sides of it. One uh one is the the the price of production will go up because of fertilizers becoming more scarce um or more difficult to obtain uh since there's disruption in the supply chain. Uh that will just re- you know just just uh increase the input cost of all the of all the producing countries. And then the question is whether they are able to pass this cost on to consumers. Um and here I think the I would imagine that actually they are. Uh China uh is still a massive importer of a lot of produce from Latin America. Uh Europe has just is just going through exactly the same economic shock uh with inflation uh you know uh just just round the corner on all foods. And certainly Brazil and other Latin countries, Argentina have a lot to offer there. Uh the Mercosur Agreement just came into into into action uh uh 10-12 days ago. Um and that's actually a very uh very timely timely agreement to come to come to come alive for the EU and uh but also for the uh for the producers and for the buyers in in in uh in Europe.

Andrew 9:22

Can I jump in? Yep. Sorry, Julian. Uh in a way I'm just kind of going over what you've you've just been saying. I see the situation as two question marks, a big macroeconomic global question mark,

Global Resiliency vs. Domestic Shortages

Andrew 9:38

and then a slightly smaller one, which is the impact in Latin America. And one of the things that strikes me is how resilient the global economy seems to have been so far, um, in the sense that we are not looking at immediate shortages in the shops or immediate um high profile disruption. It seems that the economy is responding to the sharpest increase in energy prices for a generation in a fairly resilient manner. Uh if you look at things like the Financial Times, various uh newspapers of that type, they are quoting people saying, well, the first shortages should appear by the end of May, beginning of June. Um so that if you like is my big question mark. And the smaller question mark is how does it impact specifically on Latin American countries, which is what you've been um what you've been giving us. Uh uh so I I forgive me for having interrupted you. No, no, absolutely. But but but the sort of the question I suppose I I wondered if you could address is do you think there will be shortages uh in Latin America? Uh because obviously they're politically the most sensitive at this time, particularly in the the countries with elections.

Julian 10:58

So I I don't think so uh for me shortages is uh you know Latin America is uh is rich in resources, natural resources, in all kinds of resources. Uh so it's not you know the the big risk here is food shortages, as you just mentioned yourself. But Latin America shouldn't, it's not you know, it's not uh it's not it's not a place where you should have food shortages. Uh you can literally go down cities and find plenty of plenty of food just just right at your doorstep. Uh and the uh you know and the people are resilient enough and they can just very quickly change and and and and reorganize themselves. Resilience. Uh I was at a at uh at uh at an event with lots of Latin American uh people uh uh recently and everyone joked about how resilient everyone is to operate in this country. And it's true, you know, you can you just need to reorganize yourself and and uh refunction. So food is not it's not so much of a of an issue. Uh the issue will be uh will be inflationary and jobs, will be cost of living. Uh it's and that will that will filter through, and I think yes, the most of the reports are do say that from June onwards is when you are likely to see shortages, possibly in Europe. Uh you probably have it already across uh in across the Asian countries, uh into some African countries as well. So you know they this this shortages which are which are which are uh which are uh which are you know happening. Um you know, we hear in in we hear in uh in Western Europe, we hear about cancelling flights uh because of fuel shortages already. So it is happening. Uh there's uh there's the but it's the reorganization of how things happen. And we'll come back, we'll you know, we discussed this previously about as soon as the Iran war started, and we said, well, who are the winners here of this conflict? And I you know I remain of the view that that the US is uh you know is for them, it's this is uh this is a this is a US induced conflict, and the US still remains a really uh strong in a strong position. It's still growing at 3.5%. Uh it's uh it's an energy net producer, it will export. I think uh the President Trump uh showed or tweeted or whatever, whatever the term is recently, uh not too long ago, this this image of all the tankers going to the US to get energy. There's a the US will supply to some extent the world with uh the people that came as forwarded

The US - China Balancing Act

Julian 13:47

uh with the energy. Uh and but there I think the uh this is why the the impact for Latin American countries specifically is an interesting one because uh because those that can supply energy to the rest will will actually get income out of it, and the but the others are going to be suffering quite a bit at a hundred total price of over a hundred, or you know, it's it starts becoming quite uh quite significant. We've heard recently that I think the UAE is coming out of uh OPEC, uh is uh one of the Middle Eastern countries, I can't remember, is uh is literally saying let's um that's it. So so you have a changing you have a changing uh order here. Uh and then on the other side is you have Russia who's who's still who's still out there, who has been propped up economically to some extent by by this uh by the energy prices rising. Uh but there's also massive uh huge exporters of fertilizers. And so you have all these you know underlying geopolitical events that's you know that has been caused, but actually here again the the the the winners to all the for for for all for Russia, it's it's uh it's a huge this this conflict is is uh is actually really positive. And so the question here is to what extent do they you know again does the US need to uh you know to are they impacted over the period of time? So as soon as it starts filtering to the to its economy, uh it may, you know, this is when this is when things may change. We do have midterms coming up. Uh and and at some stage, you know, the the they may decide, okay, that's it. We'll uh we live as it is. And we know that they are pretty ruthless, as we've seen you know, in Venezuela. You know, they've took it, they've taken out the the the head of the head of state and then accommodated themselves with the with whoever was there next. Uh, and we can think that they will take a similar ruthless approach to other countries completely, you know. Uh and so you know, some negotiations on on ongoing, and we'll see where where that lands. But there is the the winners again to the we can see it in the uh so in in in economic extent, we can see it in the in the markets. So I was looking yesterday trying to find the uh the sovereign yield spreads of of uh of uh of Latin American countries, which is basically an indication of you know of uh if you be you know also of confidence in in lending to these countries. And uh and really this you know there's uh there's a general say that if uh it's uh if it goes through time, so the short period uh and then of course two five years, ten years, twenty, thirty years, depending on on how much you you know on the on the duration of your lending. And there's a general say that if at some stage you will curve inverse to further you go, so further in the future, then that's uh that's uh implies uh you know a low growth or recession. Now, interesting enough, when I was looking into this yesterday, uh Chile's yield curve is actually looking pretty uh is uh is actually going down. So that's that signifies that that that uh that's a signal that uh the the uh you know the market sees a lot of risk here. And so uh Chile should be really thinking about okay, you know, it's it's being fully impacted by by everything. Uh Brazil to some extent is uh is also going down. Uh Colombia is going down, uh Mexico is more or less flat, uh, and Peru has started to alter. So you can see a movement of actually the EU started to invade for all of these countries, uh to uh to to to some extent. And um for me that's that's really uh that's that's really symptomatic of it it's it says a lot about the the unpreparation of of uh uh and the and the potential unrest that you are gonna face us, especially for these new governments. That uh you know people are gonna go, well we voted for you and now we have no food, nothing. So uh to some extent, I guess uh thanksfully they they they have uh they have some years to to go through, but uh but as some or you know they can be given the the benefit of the doubt, or they would say that it's because of the of the previous government that they that we are in such a situation. Uh but this will be this will cause uh some instability in some of these countries. And uh and then we'll we'll have to look into the uh you know into the into to to what extent is uh is an external help uh can happen. Uh to what extent is it beneficiary for the US to uh to dominate the the the subcontinent? Uh you know, are the is it of the interest for for for for governments or for countries to be to be in stability or can they pick and choose who they can uh who they can uh support in the same way that we saw Argentina more recently, you know, who was given a uh a line of credit by the US.

Andrew 19:04

Yeah.

Julian 19:05

So you I think we're gonna see more of these more of these factors uh right now. So I think it's it's there are many things. There's there's a micro impact, there's an impact to the population, there's an impact to the to the countries in itself. But we always

Technology as a Lifeline: AI and Precision Agriculture

Julian 19:20

have to think right at the right at the top. You know, they and I go back to my to to the initial you know discussion we always have about you know is is it a complete folly to go into a war that no one understands and you don't know when you get out or whatever, or is it actually something that has been planned all the way and so that to by by people is not just a president by by people around him uh and the entire you know and part of the administration apparatus uh to to to reset the dial, which is actually one of his uh you know, right at the beginning was one of one of his objectives of uh for government. Uh and we understand, you know, there was uh I think I listened recently to Scott Bessent, the US Treasury Secretary, saying that that he was given the green light to if effectively wage economic war on on Iran, uh on Iran, and and therefore you know that that meant using the weaponizing the dollar, uh using sanctions. Uh I think uh uh I think he mentioned that a uh a uh a um a bank uh went bankrupt. Then you had a pushback by by China more recently, who announced that uh they would not they would sanction any any any companies in uh in China that abided by this by the sanction given by the US more you know more or less, which basically puts a lot of people in conflict, especially if you are not a US or Chinese company. If you are a European company, you need to abide now by three rules. One, whether you f well, who do you fear most? The US sanction, uh the Chinese uh sanction, uh retaliation, or uh all the European uh uh laws. So of course you're gonna you're going to be uh you're gonna be uh binded by the EU laws uh because that's what you are, but to to a massive extent you you you got to be careful about uh the potential penalties that arise from from going against the US sanctions. Uh but at sometimes by doing this you may be committing a uh a problem with with uh with uh with China, uh who may sanction you uh now. They've explicitly said that that they may do. So it's most it's mostly for their for their for their companies, but it's a message for all the others. You know, we are now they are they they are starting to exert uh power uh from the outside, and that has implication of course for Latin American countries who trade a lot with Chinese uh and at the same time trade to some extent with with the US.

Alberto 22:00

down the the uh from what we you know the from what we see the general movement of the us uh you know trying to to ascertain its power across across latin countries and in in some ways oh sorry alberto go ahead sorry andrew yeah no the it it it's really interesting all what we're seeing because yes i i i I agree there there is a full line of implications on all of this and the situation is bad for Latin America if you are in the middle of this competition between China and the US and all what is going on and the war in Iran also has direct as I say some indirect uh effects on what is the competitiveness of the agro industry in Latin America. You were saying right uh Julian and I totally agree oil producers uh net oil producers like Brazil and Argentina can be happy about the oil but their agribusiness is huge is it is very big as well and it's being impacted so it's like a double impact and also from what you're saying about Chile and Colombia I was reading recently one of the biggest impacts on countries like Chile and Colombia which are not big producers in the case of Colombia they are they can sustain their own oil production production but there is also pressure on these countries at the inflationary level but also at the rate exchange there that there is going to be devaluation the the the the the the the their the the their notes are losing value and that's an impact as well inside the population. So we can see a lot of disrupting elements going around that I just want to read something that comes from from AgroLatum which is an uh publication that focuses on agroindustry in Latin America and says that one of the impacts that can be seen at this moment of the of the war in Iran is first diesel price hikes driving up agricultural operating costs one effect surging international freight rates due to disruption in hormones and the Red Sea so second effect logistical delays affecting grains oil seeds and fertilizers which we already talked is another effect. Fuel

Looking Ahead: Demographic Shifts, Climate Factors, and Social Unrest

Alberto 24:21

shortage in productive areas which is coming for as well and increased packaging costs due to rising petrochemical NATT prices. So there is a huge element that is going to affect the competitiveness of Latin America also to supply the rest of the world in terms of food I agree with Julian I don't think Latin America has is going to have a problem of shortage of food but in order to export there is going to have an impact and also the inflationary problems that are going to come we we recently were talking if you remember Andrew how Argentina was surprised with with with high inflation that is impacting the government of Millet in a way it's not good news for Argentina and this is happening also in Chile we are seeing in Bolivia there are massive protests there are a lot of political reasons behind there but but it has to do also with with the impact of the war in Iran and on the energy crisis that is impacting in Bolivia as well. It's a small country so we we can see a a huge domino effect on that I'd like to jump in with uh two things.

Andrew 25:34

Yeah one is just to pick up on what Julian was saying that um world trade and geopolitics has become increasingly complicated and how do you reconcile you know the interests of different superpowers your own laws um and it just strikes me that on on that subject that this is a central issue for the next um decade probably which is in my mind any rational Latin American government would want to get the best deal it can out of the United States and the best deal it can out of China and in some ways walk a sort of tightrope between those two things uh in pursuit of the national interest so um I think we may be seeing this um spread from very specific areas automobiles very specific industrial sectors and go much more widely and the question is if you are a recently elected Latin American president how do you craft your diplomatic stance in relation to the United States uh and to China and how do in turn China and the United States uh play play their cards so so I think I just we're gonna be talking about this sort of thing for quite a lot of time in the future um the other my second point is really I've sort of um uh claimed to uh Alberto that I'll bring some interesting statistic to each uh each of our podcasts that's worth reflecting on and my uh interesting statistic that I've found from the Food and Agriculture Organization of the United Nations is that Latin America is responsible for nineteen percent of world food production um whereas it is responsible for only eight percent of world food consumption in other words perhaps uniquely among the major regions of the world Latin America is a very important food exporter um and not likely to to be hurt immediately by shortages of food as we're all saying although there is you know there is real poverty in Latin America and there are issues to do with food security and and food cost they if you like require adjustments to domestic politics rather than any kind of change in the global position. But um my question to both of you really is since Latin America is such an important food producer do you see circumstances in which the current crisis comes good for particular Latin American countries?

Alberto 28:24

And again we've already Julian's already sort of um explained part of this to us by looking at um the costs that different countries face but do you think it can leverage that uh that 19% share of world food output uh to to its own benefit I can jump with two things in in in this because that's really interesting and and I agree 19% is a net exporter. As I mentioned before the the biggest risk for for a agri food exporters in Latin America is going to be competitiveness because the cost of production is going to go up because the the the insumizers and oil is going to go up but that doesn't mean that all is going to be bad the Brazil is a power in terms of agriculture and they are going to to to try to to in in in in a way balance the the this this element and on the other side Brazil has the the huge benefit of huge oil prices going around. So I think we're going to to to see probably that Latin America is going to try to keep this level of production although it's going to be a a level of impact because everything is going to cost more. There is another element that we have to to put in in in the game in terms of risks and I see this in the in this report of the World Bank that I that I was talking about commodity prices. One of the risks that it has been seen for 2026 is the possible coming of a climate phenomena like El Nino that has always an impact on agriculture. So if you combine the impact of the war in on Iran in on fertilizers and and on what helps the production of agroindustry in Latin America plus phenomena like El Nino and La Nina we can see that there is going to be pressure on exporters of agriculture in in Latin America competitiveness is going to be a pressure on on that and probably the governments are going to need to to answer to this kind of demands. On the other side at world level what we're going to see is an increased demand of food as well because we are seeing that the price of food in Latin America is not going as up and in general in the world but it's going up and some other countries like Asia even in Europe there is going to be more demand of these prices are going to up and Latin America is one of the biggest exporters so probably it's going to try to find some some responses through this that could benefit this industry. But from my point of view it's a mixed effect I think they are going to there are big risks in terms of competitiveness for this industry and the there's also the geopolitical element that is impacted in the in in the in the region most of the agricultural export exports of Latin America especially Brazil where is it going? Not only is China and we are seeing this kind of competition we have to see how Brazil or Argentina and other countries are going to play in the geopolitical world with this element I think there's um there's an interesting angle additional angle which is artificial intelligence and its use in agriculture I mean because what we're really saying is that to hold its own Latin America needs to be more competitive in agricultural production and artificial intelligence and various other technological innovations holds out the possibility of that happening of the uh crops like soya or wheat being produced in increasingly cost effective ways.

Andrew 32:30

One example is that in the past if you had a field where you needed to um attack some some weeds you would spray the whole thing with pesticides. Nowadays you can send out drones who will tell you that the entire field a lot of the field is clear of um weeds it's only in the northeast corner that there's a problem so um technology can allow you to address that problem more directly reduce the use of harmful um pesticides uh and simultaneously increase yields so that's potentially uh an opportunity for Latin America uh to help it get its way through uh the current crisis the cause I I I I think that's a really good point going go on going with artificial intelligence but that shows me uh I I'm going to sound a little bit political a a lefty political but i it it's also show me uh a structural problem in Latin America which is going to be dependence unfortunately latin america is i i can use artificial intelligence but it's not producing anything this is just a consumer of AI basically and that is going to go and depend who is the big winner in in that is probably the US uh uh uh and the companies who are going to behind on this and again a that's a structural problem in Latin America that can have a lot of uh potential in terms of commodities but it needs to to it's still relying externally to different levels AI the the the main exports to to China that external impact affect this industry that could be even more booming the cost the cost I think you know um I I remain also for me the if we just take the the the if we just take the agribusiness right now Latin countries those are producers are uh depend quite a bit on external imports so to for fertilizers but Brazil does have a plan apparently whether it's emotional is a different thing but they sort of plan to reduce that dependence from the high levels to to below uh to to around 45% or 40% and so on.

Julian 35:06

So uh so I think there's a there's a shift there whereby uh such countries such as Brazil will are are basically saying well we could you know they have all the resources Latin uh especially in South America has all the resources it needs uh and it's just a a question of well let's utilize it to actually become a you know to to rebalance ourselves our need from external parties to become more insular to some extent in the same way that the US is and China and uh and everyone is moving. And so I think that shift uh to some extent may happen and if it does happen uh actually what will happen is that it will suddenly the you know countries such as Brazil which are possibly

Brazil's Strategic Shift in Emerging Markets

Julian 35:53

in in a in by my view possibly part of the next superpowers uh you know that could could be completely net uh energy producers uh net uh uh net exporters of uh of uh of uh of goods and and and of all kinds of of all kinds of really uh necessary things which is you know which has always been to you know to some extent what they what they could do but we are seeing this movement at this present moment that this is happening uh and this war in Iran conflict is is maybe an acceleration of that of this of this motion that everyone needs to to to sort out you know what do they import or who do they depend on uh and so on and to that extent they will just reinforce themselves sorry for some of these countries in the negotiation that they have in between the various uh other powers be it uh china or the US or uh well not that it's been felt much with the European Union as a as a bloc uh and uh and so therefore that could be the you know there there's there's a there's a path for for this to be to be uh to still be uh uh for Latin to be a net beneficiary of of of all this to some extent that will depend a lot on the US and its its its uh and its plans of domination uh and you know the the and you know the signals are there you know we we we looked at this this uh article about uh uh that they that they were uh preparing the soldiers in Panama or doing training camps and and and you know they there are signals that they want to be more involved you know I don't know what I'm not sure what that means uh there's a lot of jungle around the around the around area uh around Latin America certainly uh but does that mean even you know uh fruit on the ground and what's what uh what what does it actually uh say but certainly for some countries that Brazil and surely Argentina should be you know should benefit from from from all this so there's a tight rope but it's but it's there I think Brazil is maneuvering pretty well generally speaking uh a lot of fertilizers comes from uh Russia which is uh and Brazil is not an unfriendly uh is not unfriendly to to Russia uh uh and but at the same time it's a commodity you know has been doing some some big deals with the US recently and trades a lot with with China uh all of all of which is is actually pretty good for the for the for the um for the Brazilian uh economy and the stock market has been reflecting of of this to some extent uh going up you know one of the best performers and I think it's also worth saying that as the largest Latin American country Brazil has potential economies of scale um that it can seek and and for example I'm not sure how uh technologically viable this is but the Brazilians have been talking about biofertilizers in other words um you know using using fertilizers that do not require a large proportion of fossil fuels which would reduce their dependence on on Russia um although that's probably not a priority as you're saying they they have reasonably um friendly relations with Russia uh I think it's also worth keeping an eye on India because um the incredibly fast uh demographic growth in China is beginning to level off um the population is um reaching a ceiling it would seem which is not the case in India so Brazilian exporters who have uh exported many many commodities to China are perhaps hoping to begin to export an increasing amount to India as well the cost. I think uh absolutely so I think all of this will depend a lot on you know on your Brazil has it's has scale behind it. Uh Mecosul has scale yeah has scale behind it and if you know if they manage to actually get together as a as a block uh that becomes a really important block. And uh and so it depends to some extent who needs what and and there this is the beauty of the of of the things is that you know different so the other parties need different things. So we understand that the US is uh needs a lot of energy it's it's it's main its main focus is on AI dominance uh and AI dominance needs needs to be fed uh immensely it needs to be independent uh from China uh for rare earth minerals uh and there are plenty uh around in in its uh in in in the in the southern hemisphere and and that's good for um that's uh that's good for for Brazil on the other side uh for for for China it still needs to feed itself it's got 1.3 1.4 billion uh and uh and it needs to feed the entire economy to some extent and and and and brazil has the capacity to to feed a lot of in a lot of uh a lot of things there you know from from you know from the from the pigs which is one of the major consumption in in uh in uh in uh in china to to to the to the population to to everything so there's m there's massive opportunities there uh mekosso opens up to some extent the uh IU agreement opens up the EU market which in terms of stress and um and to independentize itself from I don't know if that's a word actually to let you get away with it yeah to to from from from uh from uh from Russia and the current conflict that they may have with Russia uh they need to have this this you know this this alliance with uh with the with Brazil and the Mercosur so that he can uh get what he needs especially if there's more conflicts in in the Middle East which uh may happen may may flare up and whatever is happening there it's not is at uh it's unlikely to be short term this this the the impact will be will be you know uh it will be for for for longer term from what we can see um so there's up there's there's huge opportunities for for for for the countries to uh to come out on top and and and do and do very well and and uh and so to some extent that's you know that's uh that's a positive and going back to even for even for for commodities so China used to be a massive commodity for because of its construction uh they had uh they stopped everything is no longer a uh it's no longer hasn't been for some you know the government has has introduced massive uh uh huge policies to to to to tackle this issue of of over construction it has done so the prices have gone down 30 40 percent something you which you know would would create revolutions in in other countries um and uh and that's no longer to some extent the primary source of consumers but uh you need copper for uh for instance

The Copper Boom and the Deforestation Dilemma

Julian 43:40

for uh for pipelines for for for for wires uh if we think that we're moving towards uh electric grids all over the place and electricity and electric cars and uh data centers energy and all these things you need a a huge amount of copper yeah to to to to do all this uh so in in an AI supply chain um uh world the the Latin American countries are are are very well placed as well. And in addition to the efficiency. I just remember that uh several years ago uh Alberto and I did this this this study um to evaluate uh deforestation uh in in numerical terms versus you know what you know uh you know what where the in uh you know whether there was whether there was a value add uh uh versus the agricultural. You know, so we when you deforested some land and you put in some you decide to grow some soil or put some cows in, uh what's actually the more value if you started to evaluate um uh land or the forests uh at a certain price. And we we we had estimated you know value add and value loss uh here. And so I think here this is where it's interesting to come back to your point, Andrew, is where where AI and robotics and all of these new technologies coming in uh to make the production much more efficient uh across you know across the board because uh certainly you know we we saw at the time we they were there were a lot of the countries were actually quite efficient uh in in that in that in that analysis. And we uh we had um I think it was a professor from from Yale commenting on Twitter at the time about about what we what we what we produce. But a lot of these uh a lot of the countries were actually uh pretty efficient, which means that they they were doing somewhat some of some of the countries were standing out, so uh unfortunately for for Roberta and I believe it was was clearly not in the not looking well there. Uh Paraguay wasn't wasn't looking great, uh, but Brazil was straight on the line where it was uh on sort of uh on the line between value add and value loss. It was it was was more full on point. So there's gains of efficiency and and AI can certainly uh help to you know will help to utilize uh more, but we we can trust you know the the the producers to be in you know to be at the forefront of this, to be intelligent to to go for this, because they know how to operate in a competitive market, uh and and they know that this is uh something that uh that's uh that that would be good for them.

Andrew 46:16

We're beginning to oh sorry, go ahead. No, no, go ahead, Andrew. Go ahead. I I was just gonna say we're beginning to run out of time and whether

Closing Predictions: Social Unrest and the 2026 Outlook

Andrew 46:25

uh you might sum up what you think is most important. I I could um ask an impossible question, which I sometimes try and do, uh, we're about the likelihood of popular protests in Latin America over um food related issues, um whether whether something like that will happen in the rest of 2026, or generally, um if if you just give us uh your headlines um for for what will happen in the future.

Alberto 46:57

I will jump in and uh and I will go uh that that's what I wanted to to say before. I I will play the something that you always say Andrew. Uh let's try to be a little bit pessimist in this element. But I have a mixed feeling in in this element, and and that's my my personal view. There are opportunities, you already say. Julian just says when we're talking about sovereign yields, we we can expect recession, the pressures are around that. I don't think in that the three of us agree. I don't think it's going to be protests because of shortage of food. I think there are going to be protests because the the cost of life are going to get up. I think the the the the main problems for Latin America at this moment in in the short, medium, and long term, short term is going to be costs uh increase of production costs, which which is affecting uh challenges to be more competitive in a very interconnected world. But on the other side, I think the the medium and long-term risks are going to be inflationary pressures, uh the geopolitical pressures in we know it's it's going around. But in terms of population, I think the population are going to feel uh more the pressure on cost of living, and governments will need in a way to try to respond to this because that is probably the main problem coming ahead for new governments going around. That it's going to be impacts on supply chains, impact in a lot of levels that has a dominant effect in the rest of the region for from my point of view. So that's the kind of things that is common in Latin America. We always are used to see social press uh protests around because of inequality and all these things. And in a context of an international war, and in a context that the situation is going to get more uh worse, at least in the near future, rather than get better because of all what is happening around the world, I think there are going to be social pressure for for all the governments, whether it's right, left, or is going to be social pressures all across Latin America. And we can we can expect that. And probably that's the main challenge. That's how I'm seeing. We didn't mention here, we mentioned very well Argentina, Brazil, the two biggest benefits in terms of agriculture. Mexico is really interesting what is going to happen with Mexico in the near future as well, because it's the fourth producer of oil in the region, but also they have their own problems. And these three big are going to probably define what is going to go ahead then in the in the rest of the region. Big opportunities, definitely, but also big challenges. Yeah.

Andrew 50:14

So Julian, any any closing thoughts from you?

Julian 50:18

Yeah, I think uh thinking about it, uh, well, we can already see new governments, uh, you know, as I mean, we mentioned there are some uh there's already some instability in in in Bolivia right now. Yeah, and uh and new governments in Chile, Peru, you know, they will face the the so for Chile and Peru it's they are the you know they are the they are fairly open economies and uh uh the oil impact will be big. Uh and and and that will have its ramification at some stage. So we I would say that we can expect further further social unrest across across the board because you have also you know Colombia, Colombia not too far away, Ecuador. So you already have polarized um uh voters uh across across the continent, and that will just exacerbate the polarization to some extent. Uh but but on the back of it, you know, again I remain to to s remain to the fact that this this huge opportunity is huge resources, ability to actually need sell to and create value and sell to to everyone. Uh and so you know in the short term the pain may be there, but actually in the long term, uh it's it's uh out of all the rest, in relative terms, out of all the other um blocks, uh, whether it's China, EU, Africa, or other parts of Asia or and so on, uh except the US, because that's a different, as we say, it's uh it's it's actually probably a winner here. Uh LATAM is actually doing looking pretty good uh versus the versus the others. So I will still be uh I'm still I'm still a buyer of of Latam uh that kind of stuff.

Andrew 52:06

That that's one sure just to throw in my my my thoughts. I think um cost of living and petrol prices of the pump are gonna continue being uh politically sensitive. They have been for decades in Latin America, and I don't see that uh changing too rapidly. Um but anyway, um I hope you all enjoyed this discussion. Um and uh we'll come back with uh in two weeks with another another debate on uh the future of Latin America and the social, geopolitical, and um general issues involved. Thank you very much, and bye for now.