Fertilizer and Firepower

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM).

In this issue, you will find:

• How Russia’s sanctions can starve Latin American agriculture

• The Colombian Soldiers in Mexico’s Drug War

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The GCaM Team

The world is now defined by economic brinkmanship, with tariffs increasingly deployed as instruments of political coercion. President Donald Trump’s threat to impose sweeping 100% secondary tariffs on countries that continue trading with Russia marks a dramatic escalation on the economic front of the war.

• Though aimed at forcing Moscow toward a ceasefire in Ukraine, the shockwaves could reach far beyond the battlefield. At the center of the fallout lies a strategic but often-overlooked commodity: fertilizer. And at its most vulnerable point? The farms of Latin America—and those of the United States.

• As Trump sets a 50-day deadline for Russia to negotiate peace, NATO Secretary General Mark Rutte has warned that countries like Brazil, China and India could be “hit very hard” if they do not sever trade with Moscow.

• The rhetoric is bold. The consequences could be bolder still. Fertilizer—long spared from previous sanctions—now stands at a breaking point.

Panorama. Washington has already spent more than USD 182.8 billion in aid to Ukraine since 2022, intensifying the pressure to deliver an endgame. Yet this new policy tool may fracture more than it fixes. Even U.S. farms face direct exposure.

• For Russia, fertilizer is more than an agricultural input—it is a strategic revenue stream. As the war grinds into its fourth year, with more than one million Russian casualties and an economy increasingly walled off from the West, export sectors like fertilizer sustain the Kremlin.

• For Latin America, the consequences are immediate. Russian fertilizer drives the region’s cash crops, which in turn underpin export earnings, rural employment and food security. A tariff-induced rupture would not only slash harvests but also feed inflation, migration and regional instability.

• Moscow, for its part, is doubling down on emerging markets, aiming to capture 25 % of global fertilizer trade by 2030 with a focus on BRICS partners and the developing world.

Economic Outlook. Russia is the world’s largest fertilizer exporter, earning USD 13.9 billion annually and accounting for 16.6 % of global exports. Fertilizer ranks as Russia’s third-largest export category, contributing 3.6 % of total trade revenues. Brazil, the world’s leading soybean producer, imported USD 3.7 billion worth of Russian fertilizers in 2024—one-third of its total demand—with shipments rising 30 % in early 2025.

• Colombia, a key exporter of coffee, flowers and tropical fruits to the U.S., sources 25 % of its fertilizer from Russia, making Moscow its top supplier with imports valued at USD 228 million.

• Mexico imported more than USD 580 million, mostly urea—the primary fertilizer for corn, wheat and avocados.

• The U.S. itself remains significantly exposed, having imported USD 1.3 billion in Russian fertilizers in 2024, including key inputs like urea and ammonium nitrate. These inputs account for 15 % of total costs for U.S. farmers, especially corn and soybean producers.

Why It Matters. The World Bank has identified fertilizer price shocks in Central America as key drivers of food inflation and outward migration—a dynamic that could now play out across the Global South, where agriculture remains one of the most vulnerable sectors and a primary source of income.

• In Brazil, agribusiness represents 27 % of GDP and generates more than USD 160 billion in exports annually. Mexico’s USD 3 billion avocado industry—80 % of which is exported to the U.S.—is especially exposed to urea supply disruptions.

• Alternatives remain years away. Mexico’s plan to meet 80 % of its fertilizer needs domestically is undermined by Pemex’s chronic underinvestment. In Brazil, Brazil Potash Corp has announced plans for domestic mining, but permits and infrastructure delays cloud the timeline.

• Industry leaders like Mosaic, already detached from Russian supply chains, warn that additional sanctions could spark delivery delays, price volatility and disruptions to critical planting seasons.

What’s Next. Trump’s “secondary tariffs” may offer short-term geopolitical leverage—but at a steep strategic cost. In starving Putin of revenue, Washington may also sow scarcity—both abroad and at home.

• The persistent consequence of alienating Latin America through binary diplomacy risks pushing key partners closer to China and Russia, deepening the very divide Washington aims to close.

• This policy could strain food supply chains, squeeze farmer margins and trigger price shocks from Iowa to Itapetininga.

• While the intent to end the war in Ukraine through economic pressure is clear—even noble—it is unlikely that these measures will compel Putin to concede. Instead, they risk creating a deeper crisis: destabilizing the global food supply at its most basic level.

The dire conditions of Colombia’s military have become a gold mine for Mexico’s cartels

Panorama. Mexico is facing a sharp escalation in its security crisis: between 2,000 and 3,000 former Colombian soldiers —many with combat experience in conflicts such as Ukraine— have been recruited by cartels including Jalisco Nueva Generación (CJNG), La Familia Michoacana and Cárteles Unidos.

• Hired through social media and WhatsApp, these mercenaries train gunmen, manufacture explosives and defend territory, earning up to USD 2,500 a month.

• The practice, in place for at least 15 years, intensified in 2025—just after Iván Velásquez’s tenure—following the arrest of 12 Colombians after an ambush in Michoacán that killed eight Mexican soldiers.

• This narco-military alliance has deepened violence in the “triangle of death” (Guanajuato, Jalisco and Michoacán) as well as in Sinaloa, Chihuahua and Durango, laying bare the weakness of the Mexican state.

Why It Matters. The presence of Colombian ex-soldiers has turned cartels into professionalized armies, able to challenge the state with military tactics. In 2024, Mexico recorded 30,298 homicides, 80 % of them linked to drug trafficking. CJNG, now the country’s most violent cartel, controls key routes in 70 % of the territory.

• These fighters have increased the cartels’ lethality, responsible for over 1,200 explosive attacks in Michoacán and Jalisco since 2020. Recruitment is driven by Colombia’s inadequate military pensions—just USD 300–500 per month—up to 157 % less than what the cartels pay.

• This crisis threatens not only Mexico’s security but also foreign investment—down 12 % in 2024—and trade, with 80 % of Mexican exports going to a United States now waging its own war against the cartels.

• The absence of effective cooperation with Colombia, and Petro’s decision to play down the issue, has left Mexico confronting an increasingly sophisticated enemy on its own.

Between the Lines. Behind this trend lies a transnational network exploiting the institutional weakness of both countries. Mexican cartels seek out ex-Colombian soldiers for their experience against guerrillas and narco groups in Colombia, offering salaries that triple those of Mexican police.

• In Bogotá, however, the problem is dismissed as a “migration” issue, while President Petro prioritizes his domestic agenda.

• The López Obrador administration left a legacy of inaction: its “hugs, not bullets” policy allowed cartels to expand their control, with CJNG now operating in 28 states and dominating fentanyl exports to the U.S.—contributing to more than 70,000 overdose deaths in 2024.

• Systemic corruption and porous borders have enabled this narco-military alliance, undermining regional stability and eroding the credibility of the Sheinbaum administration.

On the Radar. Under pressure from the U.S. following the February 2025 extradition of 29 cartel leaders, Sheinbaum is pursuing a more aggressive strategy than her predecessor. But the lack of specialized forces and persistent police corruption limit its effectiveness.

• A possible U.S. move to classify cartels as terrorist organizations could justify cross-border military action, further straining bilateral relations.

• For now, Mexico seems to be running out of options. Without real cooperation from Colombia, the flow of ex-soldiers will continue.

• With 90,000 homicides projected over the next three years and cartels controlling 35 % of national territory, Mexico risks becoming a full-fledged narco-state.

What We’re Watching 🔎 . . .

Trump administration allows Chevron to restart Venezuela operations [link]

Jamie Smyth, Michael Stott y Joe Daniels, Financial Times

The Trump administration has surprised observers by softening its stance toward Nicolás Maduro’s regime, authorizing Chevron to resume oil operations in Venezuela—a clear shift from the “maximum pressure” strategy maintained only months ago. The decision has raised skepticism, coming shortly after a prisoner swap that freed 10 U.S. citizens in exchange for 252 Venezuelans, though the State Department has officially denied any link between the two moves.

Chevron, which had operated in Venezuela through joint ventures with PDVSA producing around 240,000 barrels per day, will restart operations under an initial six‑month authorization, receiving payment in oil rather than cash. The move has drawn criticism for its transactional nature and for exposing the internal contradictions of Trump’s foreign policy. Meanwhile, the future of other international oil licenses in Venezuela remains uncertain.