Much was said after the beginning of the conflicts between Russia and Ukraine, especially that sanctions imposed on Russia would restrict the global supply of fertilizers.
This possibility caused fertilizer prices to skyrocket in the international market.
Thus, those who wanted to buy fertilizers during the year’s second quarter would pay a high price. And the Brazilian market went shopping.
By the end of the year’s first half, Brazil had imported about 19.2 million tons of fertilizers, 20% more than in the same period of the previous year.
However, once a good part of the volumes needed for the harvest had been guaranteed, the pace of imports slowed down.
By the end of August, the difference in imports compared to the previous year had diminished, and 2022 is only 10% above last year.
Better to pay more than not have the fertilizer? Potassium chloride (KCl) had been trading for a few months at US$795/t, a very high level compared to its history.
After the beginning of the conflicts, the price of KCl exceeded US$1,200/t. That is an increase of more than 50% in just a few weeks.
Urea was another fertilizer that presented a very expressive increase in this period, going from US$550/t to US$985/t, an increase of almost 80%.
The need to guarantee the fertilizer for the crop made many producers purchase it at a very high cost, but still, with an acceptable exchange ratio, given that the soybean quotation was very attractive in the period.
However, not all producers thought this way. When we look at deliveries to the final consumer, we still see delays.
FERTILIZERS: DATA FROM ANDA
By the end of July this year, fertilizer deliveries reported by the National Association for Fertilizer Dissemination (Anda) showed a 3% delay compared to the previous year, especially in the states that plant soy later.
That indicates that, yes, we have a possibility of a reduction in total fertilizer consumption this year in Brazil.
However, with an estimated larger planted area than last year, it is still too early to point to a very strong reduction in total consumption this year.
The combination of an increase in planted area and a strong decrease in the total volume consumed would imply a significant reduction per hectare, which, given the high prices of commodities, can be negative for producers’ margins.
With information from Canal Rural
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
Brazil runoff, Sunday, October 25: Brazil runoff date. Latest: Brazil runoff polls, Flávio 51%, Lula 49%.