July 19, 2011

Brazilian Fertilizer Sales Surge 30% in First Semester of 2011

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

Brazilian farmers have been very aggressive in purchasing their fertilizer needs for their safrinha corn and wheat crops as well as for the 2011/12 growing season. During the first semester of 2011, producers have purchased 11.17 million tons of fertilizers which is 30% more than the 8.62 million tons purchased during the first semester of 2010. During June alone, 2.6 million tons of fertilizers were purchased, which is 50% more than in June of 2010.

Brazilian farmers came out of the 2010/11 growing season well capitalized and continued strong commodity prices are behind the push for increased use of fertilizers. According to the Minister of Agriculture, the gross receipts of the top 20 crops grown in Brazil is expected to total R$ 199 billion in 2011, which is 10% more than the gross receipts from the same 20 crops in 2010.

The record sales pace confirms what officials from the National Association of Fertilizer Distributors (Anda) had been expecting. They are forecasting that fertilizer sales in Brazil will hit a new record of 26 million tons in 2011 or 6% more than in 2010.

Brazil imports a majority of its fertilizers and fertilizer imports increased 50% during the first semester of 2011 reaching 8.97 million tons compared to 5.94 million tons during the first semester of 2010.

In 2010, the Brazilian government set a goal of being self sufficient in fertilizer production by 2020, but if fertilizer sales within the country continue to increase at a rapid pace, their goal may not be achieved. Nitrogen fertilizer is the easiest to produce and numerous nitrogen producing plants are under construction within Brazil. The production of phosphorus and potassium fertilizers is much more difficult. They require more time and investments to identify the deposits and developing the mining operations.