Brazil sees unprecedented delay in fertilizer sales

Fertilizer sales in Brazil have never been so slow, according to companies in the sector, reflecting farmers fearful of crop failures and climatic problems.

By the end of the first two months of the year, the Brazilian market had bought only 20% of the volume of fertilizer expected for 2024, half the percentage sold in previous years at this time, when it was close to 40%, according to Yara, the Norwegian multinational that leads the nitrogen market in the country.

“It’s creating a lot of stress in the logistics chain. We’re expecting some hurdles,” Yara Brasil CEO Marcelo Altieri said after an event in Brasília. “We have never seen a purchasing reality so far behind the annual progress, so it could bring logistical problems.”

The company did not provide specific figures on expected fertilizer sales for 2024 but said the slower pace was a reality of the market in general.

This delay could lead to distribution and logistics problems in the country in the coming months, as when sales start to flow, orders could pile up at dealers and the fertilizer may not be delivered in time for planting of the 2024/25 crop.

A survey by StoneX shows that the volume of fertilizer sales for delivery in the first half of the year reached 51% by February. A year earlier, this percentage was 62% and by February 2022 it was 60%.

For deliveries scheduled for the second half of the year—when the agricultural calendar for the 2024/25 harvest begins—there is also a lower commercialization rate of around 20%. Compared to the last two years, the rate in this period was 30%.

According to the Israeli company ICL, which produces minerals and special fertilizers, the scenario is expected to reverse in the coming months, given the favorable conditions of the exchange ratio (an indicator that measures purchasing capacity) between fertilizers and grains.

“The resumption of the market is essential to avoid logistical problems and the consequent difficulty for producers to access technology,” said Ithamar Prada, the company’s chief marketing and innovation officer. According to him, producers are now focused on completing the harvest and assessing the conditions for commercializing soy.

Mr. Altieri said that farmers are waiting until the last moment to make a purchase decision. In 2023, the delay in purchases was due to the expectation of lower prices. Nevertheless, the chain managed to organize itself and meet demand.

“This year is different. The trends are not the same, many products are already at the [price] bottom and some are already recovering. The longer farmers wait, the more logistical problems we could face during the harvest,” Mr. Altieri added.

See below which ports in Brazil retained the largest share of fertilizer imports in 2023, according to the DataLiner maritime data service.

Top Fertilizer Import Ports in Brazil | 2023 | WTMT

Source: DataLiner (click here to request a demo)

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