Brazil is seeing a substantial increase in fertilizer imports, moving faster than previous cycles due to favorable exchange rates. A Rabobank survey reveals that producers have significantly increased early purchases for the upcoming crop season. The rise in imports of key fertilizers such as monoammonium phosphate indicates a strategic approach to pricing and exchange rates among producers and cooperatives. Experts foresee continued high costs and tight margins impacting financial strategies across the agricultural sector.
Brazil is witnessing a significant rise in fertilizer imports, reminiscent of the surge experienced in 2022 due to supply chain disruptions following Russia’s invasion of Ukraine. The favorable exchange ratio between grains and fertilizers has motivated producers to increase their imports at this optimal moment.
A Rabobank survey indicates that from November 2024 to January 2025, producers purchased 18% of the anticipated fertilizer volume for the 2025/26 crop season, a notable increase from the 8% recorded during the same period last year. In January alone, acquisitions amounted to 7% of projections for the season, an improvement from the 5% observed a year prior.
Bruno Fonseca, an input analyst at Rabobank, notes, “At the end of last year, sales of potassium chloride rose sharply because prices were very attractive, and there were expectations of a slight increase.” He added that purchasing other nutrients like phosphorus in advance does not seem favorable due to high costs, which will likely continue.
Consulting firm Argus has also reported a significant increase in imports of monoammonium phosphate, essential for soybean, corn, and wheat cultivation. January imports reached 283,300 tonnes, nearly double the 144,100 tonnes imported in January 2024.
Argus anticipates further increases in imports; however, these will be strategically timed based on the attractiveness of input prices. Such an approach helps importers navigate exchange rate fluctuations, critical for foreign input purchasing decisions.
The expected rise in imports of single superphosphate, a substitute for monoammonium phosphate in soybean production, is noteworthy. Argus estimates that incoming shipments of single superphosphate could increase by 18% to 23% in the coming months due to its more favorable exchange ratio.
Producers are also dexterously adapting to the improved exchange conditions, with some locking in prices for the 2025/26 soybean crop to leverage the dollar’s exchange rate advantage, according to Luiz Pedro Bier, vice president of Aprosoja Mato Grosso. Despite declining soybean prices on the Chicago Board of Trade, he mentions, “A strong dollar means slightly higher revenues from grain exports, but it also significantly raises input costs.”
Industry insiders report that producers are actively seeking optimal purchasing conditions for inputs. Agricultural cooperatives are employing aggressive strategies to present attractive fertilizer sales options to farmers in anticipation of the upcoming planting season. The replenishment of input retailers is contingent upon a reduction in the dollar’s exchange rate.
Experts predict that tight profit margins alongside elevated phosphate costs will persist into 2025, significantly influencing financial strategies throughout the supply chain.
In conclusion, Brazil’s fertilizer importation is experiencing notable momentum driven by favorable exchange rates and proactive purchasing strategies among producers. Anticipated increases in imports of both monoammonium phosphate and single superphosphate reflect a response to market conditions, while financial planning across the supply chain must adapt to ongoing challenges of high costs and tight margins. The strategies implemented by cooperatives and producers showcase the urgent need to navigate this complex market environment effectively.
Original Source: valorinternational.globo.com
