Brazil Sees Increased Fertilizer Imports Amid Favorable Exchange Rates
Brazil is experiencing a notable increase in fertilizer imports as producers take advantage of favorable exchange rates. A Rabobank survey indicates an 18% early purchase of fertilizers for the 2025/26 crop season, marking a substantial rise from the previous year. Strategic purchasing decisions are being made, particularly for monoammonium phosphate and single superphosphate, amid expectations of continued high input costs and tight margins in 2025.
Brazil is witnessing a significant increase in fertilizer imports, reminiscent of the alarming price surges due to supply chain difficulties following Russia’s invasion of Ukraine in 2022. Favorable exchange ratios between grains and fertilizers have encouraged producers to enhance their import activities as they prepare for the 2025/26 crop season.
A recent survey by Rabobank revealed that from November 2024 to January 2025, producers acquired 18% of their anticipated fertilizer needs, a considerable rise compared to only 8% during the same period in the prior year. Notably, in January alone, the acquisitions accounted for 7% of the forecasted volume, up from 5% the previous year.
Bruno Fonseca, an input analyst at Rabobank, commented on the dynamic market conditions stating, “At the end of last year, sales of potassium chloride rose sharply because prices were very attractive… 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.”
Furthermore, consulting firm Argus has reported a notable increase in the import of monoammonium phosphate (MAP), essential for various crops such as soybeans, corn, and wheat. In January alone, Brazil imported 283,300 tonnes of MAP, nearly doubling the prior year’s imports of 144,100 tonnes.
Argus predicts that while imports may continue to rise, they will be executed with greater strategy, based on favorable input prices. This method will allow importers to better manage the fluctuations of exchange rates, which significantly influence purchasing decisions.
One example of strategic purchasing is the anticipated rise in imports of single superphosphate (SSP), known to be a more affordable alternative to MAP for soybean production. Argus forecasts SSP imports to increase by 18% to 23% in the upcoming months, as its price ratio is more advantageous compared to other fertilizers in Brazil.
Producers are swiftly capitalizing on the favorable exchange conditions. Luiz Pedro Bier, vice president of Aprosoja Mato Grosso, noted that commitments for the 2025/26 soybean crop are already being made to leverage the dollar’s exchange rate. He stated, “A strong dollar means slightly higher revenues from grain exports, but it also significantly raises input costs.”
It has been observed that producers are intensifying their search for optimal purchasing conditions for fertilizers. Cooperatives are employing aggressive marketing strategies to provide attractive offers to farmers ahead of the secondary crop planting season, contingent upon a decline in the dollar’s exchange rate.
Experts maintain that tight margins and elevated phosphate costs will likely continue through 2025, influencing financial strategies across the entire agricultural supply chain.
In summary, Brazil’s fertilizer import activity is on the rise due to favorable exchange conditions and strategic purchasing by producers. The significant increases in specific fertilizers like MAP and SSP reflect a calculated approach to manage costs and capitalize on market conditions. Industry experts anticipate ongoing pressures from high phosphate prices and tight margins, which will shape the financial landscape for agricultural producers in the upcoming year.
Original Source: valorinternational.globo.com
Post Comment