RIO DE JANEIRO, BRAZIL – Prices for agricultural nutrients such as phosphate and potash have been on the rise since late last year in the face of tight supplies, strong demand, and geopolitical uncertainty.
According to one of the world’s largest nutrient suppliers, farmers may have to get used to high fertilizer prices as global stocks remain stable despite a strong rally.
The extent of this recovery has exceeded expectations, said Mosaic Senior Vice President Corrine Ricard. Prices are likely to stay at high levels for longer than previously thought “because we don’t see a build-up of inventories anywhere,” she said in an interview. Even in Brazil, where high farm commodity prices and currency devaluation have boosted profits to record highs, higher fertilizer expenses could erode profits next season.
“Farmers will start to see their ability to trade fertilizer for commodities change,” said Ricard, who heads Mosaic Fertilizers, with operations in Brazil and Paraguay. “That ratio will still be quite favorable for farmers, although below 2020.”
Brazil accounts for a third of Mosaic’s sales. The company expects demand from the agricultural sector in Brazil to total 43 million tons this year compared to 40.5 million tons in 2020. Soybean and corn producers have already secured about 85% of their nutrient needs.
“Brazil is the growth engine for the company,” said the executive. “The pace of demand in Brazil has been greater than expected; it has been phenomenal.”