October 13, 2011

Brazil's Goal is to Reduce Phosphate Imports

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

The federal government in Brazil has set a goal of becoming self-sufficient in fertilizer production by the year 2020. Currently, approximately 60% of Brazil's fertilizer needs are met by imports. For example, during the first nine months of 2011, Mato Grosso farmers imported 373,000 tons of phosphate which represents an increase of 124% compared to 2010. Nearly all the phosphates consumed in Mato Grosso are imported, but that is expected to slowly start to change in the future.

Several years ago, the state government launched a systematic survey of the state to identify the potential for mineral extraction in the state. Deposits of phosphates have already been discovered along with gold, diamonds, zinc, nickel, copper, agricultural limestone, and manganese. Most of the new mineral deposits were found in the northern regions of the state which only opened up to exploration and settlement several decades ago.

The state has a long history of gold and diamond mining, but most of the easily recoverable minerals have already been exploited, especially in the southern part of the state. In fact, many of the early explores in Mato Grosso came in search of gold and diamonds.

Becoming self-sufficient in fertilizer production is very important for farmers in central Brazil where fertilizers may account for up to 40% of the cost of producing soybeans. The soils of central Brazil are very leached and low in native fertility which requires annual applications of phosphorus and potassium to maintain high levels of soybean yields. The use of imported fertilizers in central Brazil is very expensive given the high cost of transporting the raw material from ports in southern Brazil. If fertilizer deposits could be developed in central Brazil and if the infrastructure to move the products could be improved, the cost of producing soybeans and other crops is expected to fall significantly.

In 2003, Mato Grosso ranked in eleventh place among Brazilian state in the amount of minerals being extracted. The state has now jumped to fourth place, while there are hopeful signs for increased fertilizer production in the state, it remains to be seen if Brazil will reach its goal of self-sufficiency within nine years