Fertilizer imports gain momentum in Brazil’s ‘Northern Arc’

As grain crops grow at the junction of Maranhão, Tocantins, Piauí, and Bahia (Matopiba) and in northern Mato Grosso, the ports of Brazil’s ‘Northern Arc’ region become more attractive to providers of logistics services. Moreover, similarly to soybean shipments, fertilizer imports are also gaining ground on this part of the coast of Brazil.

The most prominent ports in the Northern Arc – Santarém, Belém, Itaqui, and Salvador – handled 4.4 million tonnes of fertilizers between January and June this year. The volume, which corresponded to 25% of the country’s imports in the period, is 39% higher than in the first half of 2021.

“Such increase is directly related to the growth of soybeans in Matopiba and northern Mato Grosso,” summarizes Luigi Bezzon, fertilizer and vegetable oil analyst at the American consultancy StoneX, who gathered data from the federal government.

The expansion of grain cultivation in these regions spurred structural changes in roads and ports. According to Bezzon, the increase in the supply of trucks, for example, improves freight prices as the producers can send the grains to the port and bring fertilizer to the innermost regions of the state when the vehicles make the second part of the round trip.

Soybean shipments through Brazil’s Northern Arc ports grew 8% between January and June and decreased 16% in the Center-South, according to StoneX. Itaqui and Salvador stand out in the region, but the traffic in the Maranhão terminal is more significant.

In the first half of the year, the arrival of fertilizers through Itaqui grew 51% to 1.62 million tonnes, according to the survey by StoneX, while oilseed shipments grew 19% to 7.1 million tonnes. “Ports with rail arrivals, such as Itaqui, make perfect sense [as a logistics alternative for the interior],” says Marcos Pepe Bertoni, director of operations at the Itaqui-based CLI terminal.

Controlled by the manager IG4 Capital, the company, which recently acquired two terminals from Rumo in Santos, is one of the four that form the Tegram Consortium, responsible for grain operations in the port of Maranhão. In addition, Bertoni says that the company looks into services in the fertilizer market.

See below the track record of Brazilian fertilizer imports recorded from January 2021 to June 2022. The chart below was made by using data gathered by Datamar’s business intelligence team in the platform DataLiner.

Fertilizer imports | jan 2021 – jun 2022 | WTMT

Source: DataLiner (click here to request a demo)

Return cargo

According to him, grain exports in Itaqui are advancing rapidly, so “inevitably” thinking about using return freight to improve customer costs will be necessary. “It is necessary to tie up the logistics to improve effectiveness,” he says. CLI expects to move 4 million tonnes of grain in 2022.

The company Copi, owned by Fertipar and Rocha groups, leads imports of fertilizers in the port of Maranhão. Responsible for 80% of the volume of fertilizer imports at the terminal – in 2021, the port of Itaqui handled 3.2 million tons of the input – the company intends to expand its services in Brazil.

In October, the terminal plans to inaugurate a project in partnership with VLI, a rail transport giant, which includes two ramifications. The first is the adaptation of the port structure to accommodate wagon-loading operations. The second is sending fertilizers to the city of Palmeirante, Tocantins, via rail. These two actions will require investments of R$ 300 million and are 90% complete. Today, the shipments leave the port by truck.

In Palmeirante, a terminal for receiving fertilizers integrated into VLI’s grain operations is nearing completion. “That is a new logistical corridor,” said Guilherme Eloy, CEO of Copi. “And the demand is already there.”

Copi primarily expects a shift in modal usage from road to rail, with the prospect of increased volumes. In addition, according to the executive, the vicinity of the terminal in the Tocantins should house a new pole of mixers.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/agronegocios/noticia/2022/08/04/importacoes-de-fertilizantes-ganham-forca-no-arco-norte.ghtml

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