January 21, 2011

Brazil Fertilizer Sales up 16% in 2010, Continued Increases in 2011

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Final numbers are not yet in for 2010, but estimates are that fertilizer sales in Brazil increased 16% over 2009 levels. It is estimated that 24 million tons of fertilizers were sold in Brazil in 2010. A number of factors are credited for the increase including improved commodity prices during the second half of 2010 and a general recovery of the world economy.

In September of 2008 the world economy faltered and credit lines dried up just at the time that Brazilian farmers were trying to purchase their final fertilizer needs for the 2008/09 growing season. As a result of the lack of credit, fertilizer sales in Brazil fell in 2008 and those unsold fertilizer supplies were carried over to 2009. Fertilizer sales improved in 2010 and they continued to recover in 2010. The final 2010 sales are expected to hit R$ 11.2 billion or R$ 1.5 billion more than in 2009.

The fertilizer sector in Brazil has also been the target of increased international investments. Over the last two years, US$ 1.2 billion has been invested in Brazil's fertilizer sector in order to expand production capacity and to develop new sources of raw materials. The long term goal of the Brazilian government is to reduce the country's dependence on imported fertilizers.

According to David Roquete Filho, director of the National Association of Fertilizer Distributors (Anda), if commodity prices stay strong, Brazilian producers will invest in more fertilizer applications in order to increase crop yields and there is the possibility that the demand will outstrip the supply resulting in rising prices.