Nov 27, 2009
Petrobras To Build New Fertilizer Plant In Mato Grosso do Sul
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
To the disappointment of many soybean farmers in Mato Grosso, the Minister of Agriculture in Brazil, Reinhold Stephanes, announced this week that Petrobras will build an ammonia and urea fertilizer plant in the state of Mato Grosso do Sul and not in Mato Grosso.
Mato Grosso farmers remain the largest consumers of inputs in Brazil even though they continue to reduce their fertilizer purchases in an effort to reduce costs. Thus far in 2009, Mato Grosso farmers have purchased 2.88 million tons of fertilizers compared to 2.31 million tons purchased during an equal period in 2008. The reduced usage of fertilizers, coupled with lower fertilizer prices, has resulted in lowering the cost of growing soybeans in Mato Grosso in 2009-10 by 7.6% compared to the 2008-09 growing season.
According to the Mato Grosso Institute of Agricultural Economics (Imea), it costs a soybean producer in Sorriso, located in central Mato Grosso, an average of R$ 1,540 per hectare to produce his 2009-10 soybeans. Using an exchange rate of 1.7 Brazilian Reais per US Dollar and a yield of 44 bu/ac, this cost would equate to approximately US$ 8.22 per bushel. Included in this cost were R$ 104 for seed (US$ 24.50 per acre), R$ 336 for fertilizers (US$ 79.00 per acre), and R$ 238 for chemicals (US$ 56.00 per acre).
Since Mato Grosso is the largest consumer of fertilizers in the country, soybean framers in the state felt the new fertilizer plant should have been located in the their state instead of the neighboring state to the south. The state of Mato Grosso is already the leading producer of soybeans in Brazil, has the potential to become the leading corn producing state, and it among the leading sugarcane producers in the country.