Record Harvest Anticipated to Propel Brazil’s Fertilizer Industry

Brazil’s fertilizer industry is set for growth due to a projected record harvest, with expected fertilizer deliveries potentially reaching 46 million tonnes in 2024. The National Supply Company forecasts a 9.4% increase in grain production for the 2024/25 cycle. Soybean and corn farmers make up 60% of fertilizer demand, and prices of key raw materials remain stable.

The anticipated record harvest in Brazil is poised to significantly stimulate the fertilizer sector, as indicated by Eduardo Monteiro, the head of Mosaic’s operations in Brazil and Paraguay. Although sales for the current crop cycle are complete, this historic harvest is expected to increase demand for nutrients for the upcoming planting season.

Mr. Monteiro noted, “A record harvest means plants will extract more nutrients from the soil. Farmers will need to replenish those nutrients.” He projected that fertilizer deliveries could reach 46 million tonnes in 2024, potentially setting a new record after already achieving 45.6 million tonnes.

According to the National Supply Company (CONAB), Brazil is on track to harvest 325.7 million tonnes of grains for the 2024/25 cycle, a 9.4% increase from the previous season. The previous record was set during the 2022/23 season with a production total of 322.8 million tonnes.

Additionally, a favorable exchange ratio between grains and inputs has been observed this season, enhancing fertilizer sales. While soybean prices have decreased by 3.1% in the past month, they remain 0.5% higher than six months ago, coinciding with the start of the 2024/25 crop. Corn prices have also displayed volatility, dropping 2.8% recently but increasing over 13% in the last six months.

Mr. Monteiro highlighted that soybean and corn farmers represent 60% of Brazil’s fertilizer demand. He added, “Corn prices have rebounded strongly. The trend suggests that farmers who grow soybeans in the summer and corn in the second crop will see solid profitability.”

Furthermore, prices for essential raw materials used in the fertilizer industry have stabilized or decreased since last year, reflecting positive conditions for production and sales in the sector.

In summary, Brazil’s fertilizer industry is experiencing promising growth driven by an anticipated record grain harvest. With projected fertilizer deliveries on the rise and favorable exchange ratios between grains and inputs, the market is well-positioned for expansion. The stability or decline in raw material prices also supports this positive outlook, suggesting robust profitability for farmers leveraging these conditions effectively.

Original Source: valorinternational.globo.com