Market Talks: Brazil’s fertilizer carry-over may be the highest since 2013

Author Argus

Brazilian fertilizer imports, especially of MAP, MOP and ammonium sulphate, jumped in the first half of 2022, because of concerns about global supplies. Importers slowed the pace in the second half of the year, faced with low liquidity in the domestic market.

Join Camila Dias, Argus Brazil Country Manager, and Renata Cardarelli, Senior Reporter for the Argus Brazil Grains and Fertilizer publication, as they talk about the factors that may culminate in the highest carry-over in almost a decade and the perspective for the coming years.


CD: Hello and welcome to ‘Market Talks’- a series of podcasts presented by Argus addressing the events impacting commodities and the energy sector in Brazil and around the world. My name is Camila Dias, Argus Brazil Country Manager. In today's episode, I will talk to Renata Cardarelli, senior reporter for the Argus Brazil Grains and Fertilizer publication, about the expected fertilizer deliveries to the Brazilian market in 2022 and carry-over stocks. Hi Renata, welcome.

CD: Renata, what is the expected volume of fertilizers’ deliveries to the Brazilian market in 2022?

RC: Camila, after concerns about global supplies drove up the amount of fertilizer imports, especially phosphates and potash, this question has been on everyone’s mind.

In August, some optimistic market participants even considered that deliveries would exceed 45 million metric tonnes, in line with the 45.8 million metric tonnes delivered last year. But now, in December, the market consensus is that deliveries will reach between 41 and 42 million metric tonnes this year. The most recent data released by national fertilizer distribution association Anda is that deliveries from January to September totaled 30 million metric tonnes, down by 10.5pc over the same period in 2021.

CD: But that is still a very expressive volume, isn't it, Renata?

RC: Without a doubt, Camila. Even though there will be a yearly decrease, that is still a very expressive volume, especially considering the softening of Covid-19 pandemic restrictions, the fact that we are headed to a global recession and the war in Europe, which led to a serious energy crisis.

And when we talk about an energy crisis, we are necessarily talking about raw materials for fertilizers’ production. It is in this context that fertilizer deliveries to the Brazilian market are to fall. Again: deliveries will fall, Camila, but are still expected to be higher than 2020 deliveries, which reached 40.6 million metric tonnes. It is important to highlight that 2022 is an atypical year, just as 2021 was also a very atypical year. At the time of the purchase decision for the 2021-22 crop, bater raters were more favorable for Brazilian farmers, which stimulated fertilizer deals. However, given the increase in fertilizer prices and the barter rate throughout 2021, it was expected that fertilizer usage would decrease this year that is, for the 2022-23 crop.

CD: So there was an expectation for a decrease in fertilizer deliveries for the 2022-23 season, before the conflict in Ukraine. How has the conflict reflected in Brazilian imports since then?

RC: Well, Camila, it was in that context that Brazilian importers, concerned about the global availability of fertilizers, rushed to guarantee volumes. The Argus team took part in the largest fertilizer sector’s fair, the FLA – Fertilizer Latino Americano –, which took place at the end of March and, therefore, basically a month after the Russian invasion of Ukraine. At the event, the biggest doubt for market participants was about the world supply of fertilizer. In the midst of fears about fertilizers supplies, Brazilian importers were looking to buy fertilizers. Brazilian imports, especially of MAP, MOP and AS, jumped in the period. To give you an idea, April MAP imports more than doubled from April 2021. MOP imports also advanced in the period, up by 84pc in April compared with the same month of 2021. But Brazilian importers slowed the pace down in the second half of the year, given the low liquidity in the domestic market.

CD: And what are the estimates for the carry-over volume from 2022 to 2023?

RC: 2022 carry-over is expected to reach the highest level since 2013 because of higher imports at the beginning of the year and lower demand in the domestic market. Market consensus is that carry-over may be around 10 million metric tonnes this year, compared to 7.3 million metric tonnes in 2021 and 6.2 million metric tonnes in 2020. Market participants estimate that potash will lead this volume. Brazil consumes a lot of MOP, and in 2021, for example, potash accounted for 27pc of fertilizer deliveries to the market, totaling 12.5 million metric tonnes. But potash is the nutrient that can be reduced the most among phosphates, nitrogen and potash, because of its ability to remain in the soil for a longer period.

But some market participants disagree. While the most optimistic estimate a potash carry-over of around 1.5 million metric tonnes, the most pessimistic estimate a carry-over of 3 million metric tonnes. In 2021, MOP carry-over reached 1.7 million metric tonnes and the market consensus is that this year’s volume will certainly exceed that.

Phosphates are the second nutrient that can be reduced the most. It is possible to grow up to two crops with less phosphates than usual, with little effect on yields, according to market participants. And, at this moment, farmers have postponed purchases of nitrogen for application in the 22-23 winter corn crop – which may influence carry-over stock, especially of urea and AS, with last-minute purchases expected to take place in January.

CD: What is the market’s estimate for fertilizer deliveries in the coming years?

RC: Market consensus is that Brazilian deliveries of fertilizers will rise again in 2023, Camila. Some participants estimate deliveries of around 43.5 million metric tonnes, with a growth in the consumption of the three macronutrients – nitrogen, P2O5 and PO2. In 2024, there may be another growth and, finally, in 2025, fertilizer deliveries to the Brazilian market may be in line with 2021 levels, exceeding 45 million metric tonnes. Of course, these estimates must be taken with caution, as there may be changes because of fundamentals and, of course, Brazil’s agricultural production estimates.

CD: Thank you very much, Renata.

This and other episodes of our podcast are available on the Argus website at Visit the page to follow the events that affect global commodity markets and understand their developments in Brazil and in Latin America. We'll be back soon with another edition of “Market Talks”. See you soon!

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