Brazil’s Fertilizer Imports Experience Significant Growth Amid Market Changes
Brazil’s fertilizer imports have surged, driven by a favorable exchange ratio and improved purchasing strategies among producers. A Rabobank survey reveals a significant increase in early purchases for the upcoming crop season, with key fertilizers like MAP and SSP anticipated to rise in imports. Industry experts forecast ongoing challenges with high phosphate costs affecting financial planning across the supply chain.
Brazil’s fertilizer imports are on the rise, reaching levels not observed since the disruptions caused by Russia’s invasion of Ukraine in 2022. A favorable exchange ratio between grains and fertilizers is encouraging producers to capitalize on current market conditions, resulting in increased imports.
A Rabobank survey indicates that from November 2024 to January 2025, producers acquired 18% of the total fertilizer volume intended for the 2025/26 crop season, a notable increase from the 8% early purchases recorded in the previous cycle. In January specifically, acquisitions constituted 7% of the projected volume for the season, increasing from 5% a year prior.
Bruno Fonseca, an input analyst at Rabobank, stated, “At the end of last year, sales of potassium chloride rose sharply because prices were very attractive, and there were expectations of a slight increase. For other nutrients, such as phosphorus, it was not worth purchasing in advance due to high prices, and that trend is expected to persist for some time.”
Consulting firm Argus also reported an increase in imports of monoammonium phosphate (MAP), crucial for soybean, corn, and wheat crops. January imports reached 283,300 tonnes, almost doubling the 144,100 tonnes imported in January 2024.
Argus forecasts continued growth in imports but expects purchasing strategies to be influenced by input price attractiveness. This strategic purchasing will enable importers to adapt to exchange rate fluctuations, an essential consideration in foreign input purchases.
There is an anticipated rise in imports of single superphosphate (SSP), regarded as a replacement for MAP in soybean farming. Argus has suggested that SSP may become more economically viable, estimating imports could increase by 18% to 23% shortly, as the exchange ratio for SSP remains more favorable in the Brazilian market.
Producers are actively leveraging improved exchange conditions. Luiz Pedro Bier, vice president of Aprosoja Mato Grosso, mentioned ongoing price lock-ins for the 2025/26 soybean crop to benefit from the dollar’s exchange rate. Despite downward trends in soybean prices on the Chicago Board of Trade, the strong U.S. dollar is expected to enhance revenue from grain exports, although it raises input costs significantly.
Industry experts report that producers have intensified their efforts to identify the most favorable purchasing conditions for inputs. Cooperatives are implementing aggressive marketing strategies to offer appealing terms for farmers purchasing fertilizers prior to the second crop planting season. The replenishment of input retailers will rely heavily on declines in the dollar’s exchange rate.
In conclusion, experts predict that tight profit margins and elevated phosphate costs will continue through 2025, thus impacting financial planning throughout the supply chain.
In summary, Brazil’s fertilizer imports are increasing significantly, spurred by positive market conditions and favorable exchange ratios. Producers are strategically purchasing fertilizers, with notable growth in imports of MAP and expectations around SSP. Despite potential cost pressures from high phosphate prices, producers are aligning their purchasing strategies to optimize their operational efficiency in response to currency fluctuations and market trends.
Original Source: valorinternational.globo.com
