Dropping Fertilizer Imports Alarm Sector

Fertilizer supplies in Brazil have dwindled due to geopolitical conflicts, with imports of ammonium nitrate (AN) from Russia dropping to zero in February. This raised concerns in the sector about product availability, as reported by GEP COSTDRIVERS. Brazil’s reliance on imports makes its agricultural market susceptible to global macroeconomic conditions, like wars and external inflation. Recent conflicts, such as the Russia-Ukraine war, have heightened uncertainty in the fertilizer market.

The war disrupted ammonium nitrate imports from Russia to Brazil, resulting in a complete halt in February 2024. This led to a 27.55% decline in the country’s total imports in the first quarter compared to the previous year. In the Middle East, imports of simple superphosphate from Israel plummeted by 60.55% in the same period due to conflict with Hamas. Urea purchases from Iran remain regular but require close monitoring due to its conflict with Israel.

“The current scenario is alarming for the market because we cannot predict the resolution of conflicts or the next steps of the involved countries. Consequently, we anticipate a continued decline in imports of certain fertilizers throughout the year, jeopardizing the availability of these inputs,” says Isadora Araújo, an economist at GEP COSTDRIVERS. “Regarding domestic production, we expect a decrease of -4.13% this year compared to 2023, which already saw a reduction,” she adds.

The chart below uses DataLiner data to illustrate the volume of fertilizer imports recorded from Jan 2021 to Feb 2024.

Brazilian Imports of Fertilizers | Jan 2021 – Feb 2024 | WTMT

Source: DataLiner (click here to request a demo)

Despite the drop in imports, average FOB fertilizer prices declined in March. This suggests that the market has yet to adjust prices to reflect the reduced supply due to high-interest rates and weak demand.

Source: Agrolink

Click here to read the original news piece: https://www.agrolink.com.br/noticias/importacao-de-fertilizantes-cai_490521.html

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