Nov 17, 2009
Brazil Searching For Additional Domestic Supplies Of Fertilizers
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazil is poised to become one of the largest food producing countries in the world with an agricultural sector that accounts for 33% of the country's GDP and 42% of Brazil's exports. With that in mind, government officials and agricultural leaders are very concerned that 75% of all the fertilizers consumed with Brazil are imported. In the case of potassium, 91% is imported. The concern is that this large part of the Brazilian economy is highly dependent on imported fertilizers and the accompanying variation in supply and prices.
Recent price spikes in fertilizer prices has convinced the Brazilian government that they need to do more to secure additional domestic supplies of fertilizers for Brazilian farmers. In 2009, the average price of imported potassium was US$ 645 per ton, which was 26% higher than in 2008. For the last 24 years, there has only been one mine in Brazil that produces potassium chlorate. It is located in the state of Sergipe and Petrobras opened it in 1985. With only one source of domestic potassium, Brazilian farmers are beholding to foreign supplies for this important component of Brazilian agriculture. The seven countries that import most of the fertilizers in Brazil include: Canada, Russia, Germany, Israel, United States, Spain, Chile,
Brazilian geologists feel there is an ample domestic supply of potassium if only there were enough financial resources dedicated to developing them. In the state of Amazonas, geologists have located what they think is the third largest potassium deposit in the world with only the deposits in Canada and Russia being larger. According to the director of the National Department of Mineral Production, the Amazon deposits are large enough to not only supply all the domestic needs in Brazil, the country could also become an exporter of potassium in the future. Brazilian geologists feel that they have the technological know-how to develop these deposits in an environmental safe manor.
The Minister of Agriculture has asked the Minister of Mines and Energy to place a high priority on the construction of fertilizer plants to produce urea, locating deposits of phosphorus and potassium in Mato Grosso and Amazonas, and opening up the domestic market to fertilizer companies to develop more domestic supplies.
Recent discoveries of potassium off the cost of Bahia may offer additional opportunities to increase domestic supplies. In the process of exploring for offshore petroleum, potassium deposits were found close to shore and at a dept of 800 meters. The National Department of Mineral Production has already issued leases to various fertilizer companies who are developing extraction techniques. Geologists feel they can be successful in extracting the potassium because of the close proximity to shore and the relative shallow ocean depth.