Agricultural Production and Fertilizer Consumption in the Southern Cone

Camila Fontana: Hello everyone and welcome to Market Talks, Argus' weekly podcast series covering the key topics in the commodities and energy sectors. I am Camila Fontana, Deputy Bureau Chief at Argus Brazil. In today's episode, we will be discussing the grain and fertilizer markets in the Southern Cone with a special focus on Argentina. 

With me to talk about this topic are fertilizer expert Renata Cardarelli and agriculture specialist Jeffrey Lewis. Welcome to both of you. And so, I am going to start with Renata. 

How has the fertilizer market been behaving in Argentina? Is the country expected to see an increase in fertilizer utilization this year? 

Renata Cardarelli: Hi, Camila. It is a pleasure to be here. Thank you very much. 

And yes, the outlook points to an increase of fertilizer usage in Argentina. Market participants indicate that volumes could exceed 5 million metric tonnes this year, with some market participants estimating around 5.2 million metric tonnes compared to less than 5 million last year. Last year, farmers used 4.9 million metric tonnes. 

This growth is mainly due to the positive outlook for the country's 2025-26 corn crop. The latest report from the USDA points to a projection of around 53 million metric tonnes of corn produced this season, the 2025-26 season, compared to 50 million metric tonnes in the previous season. So, at the moment, Argentina is facing low liquidity in the fertilizer import market, as farmers focus on corn planting, which is progressing fast and under favourable rainfall conditions. 

There is some spot demand for immediate delivery, especially for Urea. And nitrogen fertilizers accounted for most of deliveries last year, totaling around 3 million metric tonnes, or 57pc of the total Argentina used during the year. Urea imports are pretty much in line this year compared to last year's figures, accounting for 652,000 metric tonnes from January to August, the most recent data available. 

Expectations are now that nitrogen fertilizer transactions will intensify between October and December. And of course, Argentinian market participants are watching very closely Brazil and the Indian market, especially the tenders India has been doing in the recent weeks. 

CF: Jeffrey, we have been hearing for a while now that Argentina is set to have a bumper wheat crop this year. What is the current situation? Do we see any problems so far? 

Jeffrey Lewis: Hi, Camila. Thank you for having me on as well. Well, yes, the situation is that it is looking very good for Argentina's wheat crop. 

As Renata mentioned before, there has been a lot of rain. It was a very rainy winter, and that is unusual for the agricultural regions in Argentina. That has really left really good soil moisture levels across a lot of that region. 

The rain has also been much more widespread. Normally, we would get it more focused in certain areas. And over this past winter, southern hemisphere winter, they have had rain really spread out in a much broader area. 

So, it is looking very good. The conditions are good for the soil. They have been fertilizing a bit more. They use less fertilizer than for corn, as everybody knows. But so, yes, the expectations have been good for a couple of months now because it has just kept raining and raining and raining. And so, you know, as we are where we are now, people are still expecting a very good crop. 

The Buenos Aires Great Exchange has a forecast now for 22 million metric tonnes for 2025-26 marketing year. And the Rosario Board of Trade is forecasting 23 million tonnes. And it is normal for those two to have slightly different numbers. It happens every year. And for both of those, that would be at or near record level. So, yes, we are really expecting a good crop. 

CF: Back to Renata. In Brazil, farmers have been buying and replacing high-concentration nitrogen and phosphorus fertilizers with lower-concentration alternatives. Is this trend holding across the southern corn? 

RC: Yes, that is true, Camila. In Brazil, farmers have been – it is quite common, actually – that farmers have been trying to use more fertilizers with low liquidity, low content of nitrogen, phosphate, and phosphorus, especially substituting SSP, replacing MAP and urea and using more ammonium sulfate instead of urea. This shift is driven mostly because of price and global availability. 

In Argentina, that is not the trend. We have been hearing from market participants that they are following what is happening in Brazil. And, of course, they will be analysing the soil. But that is not happening. They are still analysing, but they do not exchange, they do not trend and replace SSP, MAP and ammonium sulfate instead of urea. 

We know that ammonium sulfate imports in Argentina fell this year. So, from January to August, the drop represented 19pc. While in Brazil, it rose quite significantly, up to 52pc from January to September. And in Paraguay, that is an interesting situation because Paraguay typically sources ammonium sulfate from Brazil, receiving around 10pc of Brazil's imported volume between January and September this year. 

With greater availability of ammonium sulfate in Brazil, farmers in Paraguay have been postponing and delaying their decision of ammonium sulfate purchases for use in the second corn crop. 

So, basically, in Argentina, market participants are watching the developments to understand what is happening in Brazil and maybe for the future to substitute. But for this season, we have not been hearing that similar pace. 

CF: Jeffrey, do you hear of any problems in Argentina so far? 

JL: Well, yes, actually, there have been some issues, almost all of them related to the excess of rain. 

I said before that it rained a lot all over the agricultural area. And where it really, really rained a lot was in Buenos Aires province, especially in the central part of that province. And Buenos Aires province is by far the most important province for agriculture in Argentina. It is the biggest producer of wheat, of corn, of soybeans, and of barley. And so, the problems that we have had with the rain in Buenos Aires has been spread across all of those crops. 

You have had flooded fields, which has resulted in some wheat area not being able to be harvested, basically washing away fertilizer. It is also flooded rural roads, making transportation harder, making it harder for farmers to get into the fields. But this is very much restricted to just this area of Buenos Aires province. You have got all these other crops are also growing in Cordoba and Santa Fe and other provinces. 

So, it is very much focused in that area. It is not a big problem, but it is having an impact. And for wheat, for instance, the expectations for yields are so high that even though they have lost some area that is going to be harvested, they are still thinking possibly record harvest. 

It has been a problem, but it is not going to wreck the harvest or anything. 

CF: What is the outlook for the market once the wheat crop is harvested? 

JL: Well, the harvest starts in mid-November and loading for export generally starts in early December. And for Argentina right now, the outlook is very good. They have a lot of wheat coming in. Other producers are also expected to have very good harvest. So, prices are low, near a five-year low in global markets. 

Argentine wheat has been very competitive in Southeast Asia and prices are also competitive into other regions. And for instance, Australia, which is also southern hemisphere, harvesting around the same time, their wheat exports are going to be held up a bit by problems in the ports, basically competition with other crops that have taken up a lot of slots. And another big competitor is the Black Sea. 

And in the Black Sea lately, for a while now, a couple of weeks, the farmers there have been reluctant to sell. They are waiting for better prices. So, if, you know, assuming Australia can work out the problems with the ports and if Black Sea farmers continue to not want to sell, then Argentina could have a very good December in terms of wheat sales. 

CF: Renata, about Paraguay, soy planting for the2025-26 crop is moving forward now. And how are buyers in the Paraguayan market behaving with regard to the second corn crop? 

RC: Yes, Camila, our market participants are really focused on planting soybeans in Paraguay. Producers are focused basically on pork and crop field works, which is not favorable for purchases for the next corn season. 

The expectations are for an increased demand of potash now in October and especially in November to supply corn crop. MOP imports in Paraguay rose this year by 6pc between January and September. And we expect to see this market moving forward, especially in these two months to supply the next corn crop. 

Market participants in the region in Paraguay estimate that around 40pc of Paraguay's fertilizers needs for the2025-26 corn crop still need to be down. So, there is a lot to be negotiated this year. 

CF: Thank you, Renata. Thank you, Jeff. Super happy to have you both here. Thank you to everyone who joined us for another episode of Market Talks. 

All episodes of this series are available on the main streaming platforms. We'll see you next time. Thank you.