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February 22, 2011

Fertilizer Prices Rise as Consumption Increases in Brazil

Fertilizer sales in Brazil during 2010 totaled 24.5 million tons, which was 9.4% more than the 22.4 million tons sold in 2009. According to the Ministry of Agriculture, the state of Mato Grosso led the way with the consumption of 4 million tons, followed by Sao Paulo at 3.5 million, and Minas Gerais at 3.1 million. With the increased sales came increased prices as well. The year-on-year price increase in the state of Mato Grosso was 28% and in Goias, it was 10%. The price hikes for fertilizers is believed to be directly related to the increased prices for commodities worldwide.

According to the Agriculture and Livestock Federation of Goias (Faeg), the average price for a ton of fertilizer in January of 2010 was R$ 891 per ton and in January 2010, it increased to R$ 987 per ton.

The Mato Grosso Institute of Agricultural Economics (Imea) estimates that the cost of fertilizers accounted for approximately 45% of the cost of growing soybeans in 2010/11. During the current growing season, Imea estimates that in the municipality of Sorriso, located in central Mato Grosso, the average cost of growing soybeans in 2010/11 was R$ 936 per hectare and the cost of fertilizers alone was approximately R$ 400 per hectare (43% of the total).

The Brazilian government has set a goal of being self sufficient in fertilizer production within ten years, but progress toward this goal has been slow thus far. In 2010, Brazil produced 9.3 million tons of fertilizers (38% of the total consumption), which was 12% more than the 8.3 million tons produced in 2010, but fertilizer imports in 2010 totaled 15.2 million tons (62% of the total consumed) or an increase of 38%.