Fertilizers heavily dependent on imports

In the face of growing global pressures on environmental preservation, the agribusiness that makes Brazil a powerhouse in food production has a great ally in the fertilizer industry. With fertilizer, productivity increases, avoiding expansion of the planted area. However, there are major bottlenecks to be overcome. Specialists in the chemical and agro-industrial sectors point out the cost of inputs, especially natural gas and the logistical difficulties in receiving it, are obstacles to increasing the production capacity of fertilizers in Brazil. This scenario forces the country to import around 85% of its fertilizer needs.

“To be competitive, fertilizers need competitive raw material. In Brazil, natural gas costs three times more than in the United States and a little more than in Europe”, says the director of economics and statistics at ABIQUIM (the Brazilian chemical industry association), Fátima Giovanna Coviello Ferreira. “The raw material represents about 80% of the costs of fertilizers, especially nitrogenous ones.”

Data from ANDA (the national association for the diffusion of fertilizers) show that in 2020, 40.6 million fertilizers were delivered to the market, 11.9% more than in 2019. National production fell by 10% and closed at 6 .4 million tons. About 584,000 tons were exported, 109.6% above 2019. To meet the needs of the domestic demand, Brazil imported 32.8 million tons of fertilizer intermediates, 11% more than in 2019.

See below a history of Brazilian fertilizer imports since January 2019. Data are from DataLiner:

Brazilian Fertilizer Imports | Jan 2019 to Aug 2021 | WTMT

Source: DataLiner (click here to request a demo)

ANDA does not make future projections. In the first half of this year, 9 million tons of fertilizers were delivered, 20.3% above the same period in 2020. Domestic production fell 11%, reaching 1.5 million tons. To supply the country, imports grew 23.4%, to 7 million tons. Exports increased further, 33.9%, to 119,000 tons. “Global demand today is greater than the supply of fertilizers. It is a worldwide concern”, says Ricardo Tortorella, executive director of ANDA.

According to him, with imports increasing year after year, the Brazilian situation needs to be more balanced. To achieve this balance, a public policy is needed to address the issue. Tortorella says agribusiness analysts and consultants estimate that fertilizer deliveries in 2021 could grow double digits over 2020.

Source: Valor Econômico

To read the full original article, visit the link:

https://valor.globo.com/empresas/noticia/2021/09/29/fertilizantes-com-forte-dependencia-das-importacoes.ghtml

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