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Brazil aims to cut fertilizer imports by quarter

  • : Agriculture, Fertilizers
  • 22/02/24

Farming powerhouse Brazil is launching a national fertilizer plan to reduce its dependency on imports by more than a quarter to nearly 60pc of national consumption by 2050.

The plan, which would reduce imports from their current 85pc of consumption, will be officially released after the signing of a presidential decree. In March 2021, Brazil, a leading producer of soybeans, corn, cotton and coffee, undertook the crafting of a national fertilizer strategy to consider ways of boosting fertilizer output to make the country less dependent on imports.

Discussions led to a 195-page technical document that was made available to Argus and will be the basis for the governmental decree.

Among the plan's goals, Brazil intends to increase nitrogen installed capacity gradually up to 2.8mn metric tonnes (t) by 2050. To reach that volume, the plan includes attracting at least two more nitrogen producers in Brazil through 2030 and another four through 2050. As for private investments, the government seeks to attract at least $10bn to increase nitrogen production — and output of raw materials — by 2030 and the same amount each decade by 2050.

In 2020, Brazil produced 224,000t of nitrogen fertilizers, according to the document, an amount that could meet 4.3pc of the country´s demand in the same year. Operating at full installed capacity, local production could meet 17.6pc of consumption. The document highlights that demand for nitrogen fertilizer may double by 2050.

Brazil currently has three operational nitrogen units. Leased from Petrobras, Unigel's Camacari unit, in Bahia state, has an installed capacity of 475,000t/yr of ammonia and another 475,000t/yr of urea. Unigel's Laranjeiras unit, in Sergipe state, has an installed capacity of 650,000t/yr of urea, 450,000t/yr of ammonia and 320,000t/yr of ammonium sulphate. Yara has an installed capacity of 211,000t/yr of ammonia and another 416,000t/yr of ammonium nitrate.

Investment costs in producing plants as well as operating and raw material costs are determinants for competitiveness of Brazilian fertilizer. Natural gas is the main source of energy for producing nitrogen fertilizer in Brazil and prices for the raw material are a major factor in enabling local production of ammonia and urea.

Brazil is still in the early stages of a natural gas market opening, and the development of this market is essential for the local fertilizer industry. New players in the natural gas segment are expected to add competitiveness and liquidity to new contracts. Brazil also intends to enable bilateral agreements with its neighbors, Bolivia and Argentina, by 2025 to access natural gas from these countries.

While with nitrogen the goal is based on ways to boost Brazilian access to the raw material, regarding phosphates and potash, Brazil is focused on mapping out mining possibilities. One of the goals is to increase phosphate rock exploration by 3pc each year through 2030 and by 2pc each year until 2050. Gradually, Brazil intends to enhance its phosphate rock production to reach 27mn t/yr. The plan also envisions the addition of other two phosphate fertilizer and raw materials producers in new mining areas by 2030, totaling seven producers and increasing that number to 10 by 2040.

On potash, Brazil aims to raise national production gradually through 2050 to 6mn t of installed capacity. To reach that volume, the goal is to double to 10 the amount of potash and raw materials producers by 2030, adding another 10 producers by 2040. Brazil has only one potash producing unit, in Sergipe state, owned by Mosaic Fertilizantes and whose production reached around 9.5mn t in 2020. The main potash deposits with exploration potential mapped so far are located in Sergipe and Amazonas states and account for around 3pc of global deposits.

Steps to reach goals

To increase production and installed capacity, Brazil's government aims to encourage international investments by enabling financial incentives and reducing redtape.

Supported by the ministry of foreign affairs, Brazil intends to discuss at the Organization for Economic Co-operation and Development (OECD) ways of attracting international and national investors to the fertilizer market. The discussions will be valuable in encouraging bilateral agreements with leading global producing markets, such as Belarus, Canada, China, Morocco and Russia, among others.

A Brazilian government source told Argus the government has already taken a series of moves envisaged by the plan. Last week, agriculture minister TerezaCristina Correa da Costa paid a visit to Iran, where delegates of Brazilian and Iranian companies signed an agreement to barter 400,000t of Iranian urea for the same volume of Brazilian soybeans and corn.

All projects to develop and increase fertilizer production require long-term planning and investments in infrastructure. To encourage that, the plan includes a proposal to craft a law by 2025 to add special incentive norms for the development of fertilizer industry infrastructure.

By 2030, the government wants to enable at least five auctions of mining areas for phosphate fertilizers and another five auctions for areas of potassium fertilizers.


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24/11/08

Talks to restart as port of Vancouver lockout drags

Talks to restart as port of Vancouver lockout drags

Calgary, 8 November (Argus) — A labour disruption at the port of Vancouver is now into its fifth day, but the employers association and the locked-out union are to meet this weekend to try to strike a deal and get commodities moving again. Workers belonging to the International Longshore and Warehouse Union (ILWU) Local 514 on Canada's west coast have been locked out by the BC Maritime Employers Association (BCMEA) since 4 November. This came hours after the union implemented an overtime ban for its 730 ship and dock foreman members. The two sides will meet on 9 November evening with the assistance of the Federal Mediation and Conciliation Service (FMCS) in an effort to end a 19-month long dispute as they negotiate a new collective agreement to replace the one that expired in March 2023. The FMCS was already recruited for meetings in October, but that did not culminate in a deal. Natural resource-rich Canada is dependent on smooth operations at the port of Vancouver to reach international markets. The port is a major conduit for many dry and liquid bulk cargoes, including lumber, wood pellets and pulp, grains and agriculture products, caustic soda and sodium chlorate, sugar, coal, potash, sulphur, copper concentrates, zinc and lead concentrate, diesel and renewable diesel liquids and petroleum products. These account for about two-thirds of the movements through the port. Grain operations and the Westshore coal terminal are unaffected while most petroleum products also continue to move, the Port of Vancouver said on 7 November. As the parties head back to the bargaining table, the ILWU Local 514 meanwhile filed a complaint against the BCMEA on 7 November, alleging bargaining in bad faith, making threats, intimidation and coercion. "The BCMEA is trying to undermine the union by attempting to turn members against its democratically-elected leadership and bargaining committee, said ILWU Local 514 president Frank Morena on 7 November. "They know their bully tactics won't work with our members but their true goal is to bully the federal government into intervention." But that is just "another meritless claim," according to the BCMEA, who wants to restore supply chain operations as quickly as possible. The union said BC ports would still be operating if the BCMEA did not overreact with a lockout. "They are responsible for goods not being shipped to and from BC ports — not the union," Morena says. The ILWU Local 514 was found to have bargained in bad faith itself already, according to a decision by the Canada Industrial Relations Board (CIRB) in October. Billions of dollars of trade are at risk with many goods and commodities at a standstill at Vancouver, which is Canada's busiest port. A 13-day strike by ILWU longshore workers in July 2023 disrupted C$10bn ($7.3bn) worth of goods and commodities, especially those reliant on container ships, before an agreement was met. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Spain eyes renewed Algerian urea trade


24/11/08
24/11/08

Spain eyes renewed Algerian urea trade

Amsterdam, 8 November (Argus) — The Algerian government appears set to resurrect its commercial agreement with Spain, having stopped trade in June 2022 following a political dispute, prompting the potential renewal of urea shipments between the countries. The return of trade between Algeria and Spain is increasingly likely, as tensions between the countries ease. Algeria announced an end to its side of a 2002 co-operation agreement with Spain in June 2022 following a dispute related to the Western Sahara. Details regarding the expected renewal of the agreement are scant so far, and Spanish importers are unclear as to how and when trade can return. The potential restart of urea shipments is only likely to emerge after the start of 2025, as suppliers will have to wait for fresh export licences with Spain listed as a permitted destination, traders said. Trading firms are typically granted annual export licences before the start of each year. Algeria was the largest supplier of urea to Spain in 2021, accounting for a third of the 1mn t imported that year. Egypt has since taken Algeria's market share, with its exports making up just over 40pc of Spanish urea imports so far this year. Algeria has 3.6mn t/yr of granular urea capacity, with AOA operating two 1.2mn t/yr plants and Sorfert the remaining 1.2mn t/yr facility. By Harry Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

PKO insufficient for EU market under EUDR


24/11/08
24/11/08

PKO insufficient for EU market under EUDR

London, 8 November (Argus) — The European oleochemical market will have insufficient palm kernel oil (PKO) supply under the EU Deforestation Regulation (EUDR), delegates heard today at the 20th Indonesian Palm Oil Conference and 2025 Price Outlook (IPOC 2024) in Nusa Dua, Bali. The cost of compliance with the EUDR will tighten PKO supply for EU markets as fewer palm oil producers are expected to comply with the regulation, further increasing prices into the EU bloc, according to Glenauk Economics managing director Julian McGill. Additionally, an excessive investment in fatty alcohols production in Indonesia will limit the country's exports, further tightening global supply, according to McGill. Indonesia currently consumes 70pc of its PKO production, McGill said. The EUDR requires mandatory due diligence from operators and trading firms selling and importing palm oil and its derivatives into the EU bloc, including PKO. Firms must ensure that products sold in the EU have not contributed to deforestation or forest degradation. Although the regulation is originally expected to take effect from 1 January 2025, the European Commission recently proposed an extra 12 months "phasing-in time" for implementation, which will be voted on by the EU parliament, probably on 14 November. But "the problem with the EUDR will not be solved by postponing the regulation, as European demand for PKO will remain excessive compared to that for palm oil," Julian McGill said during the conference. To fulfil European demand for PKO, producers will have to generate more EUDR compliant palm oil than actually needed, according to McGill. The average yield of PKO from fresh palm oil fruit bunches is 2-5pc. McGill also highlighted that another important problem to be solved for the EUDR to be correctly implemented is the complexity of traceability requirements for palm and palm kernel oil, because they are liquid goods, unlike wood, coffee and cocoa beans. By Carolina A. Palma Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Nutrien lowers 2024 nitrogen sales guidance


24/11/07
24/11/07

Nutrien lowers 2024 nitrogen sales guidance

Houston, 7 November (Argus) — Major fertilizer producer Nutrien lowered its 2024 nitrogen sales guidance following extended turnarounds and unplanned outages in the third quarter. Nutrien reduced its expected sales of nitrogen products in 2024 by 200,000 metric tonnes (t) to 10.6mn t, the company said in its third quarter earnings report. Nutrien's Port Saskatchewan facility in Alberta suffered from a power outage during the period causing unexpected downtime, Nutrien said. The producer's Augusta, Georgia , and Geismar, Louisiana , plants experienced brief outages following hurricanes in the US Gulf coast in September. Nutrien's Trinidad nitrogen facility wrapped up a turnaround in the third quarter, Nutrien said. And the producer's Lima, Ohio, plant also underwent a turnaround from August into September, according to sources. Third quarter nitrogen sales increased by 2.8pc from a year ago to 2.45mn t despite outages at its plants. But Nutrien estimated US nitrogen inventories to be "well-below average levels" at the end of the third quarter, which the company expects to support demand in the coming months. Nitrogen markets have been supported by tightness in global supplies, with the company pointing towards supply disruptions, delays of new capacity, and rising European natural gas prices. China's restrictions on urea exports and production challenges elsewhere have firmed nitrogen markets as well, Nutrien said. On the demand side, urea consumption in China has grown 14pc annually, bringing consumption there to 60mn t as the government focuses on domestic agricultural production, Nutrien said. In the US, crop margins have declined compared to recent years on lower crop prices and higher costs, but below-normal grain stocks globally should support US agricultural markets, Nutrien said. The company said it expects strong fall nitrogen demand following significant nutrient depletion and an early harvest. By Calder Jett Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Indian importers buy 110,000t of Saudi DAP


24/11/07
24/11/07

Indian importers buy 110,000t of Saudi DAP

London, 7 November (Argus) — Saudi Arabian fertilizer producer Ma'aden has sold a combined 110,000t of DAP to three Indian importers — including IPL — at around $635/t cfr. The product will be shipped this month. The price nets back to the low-to-mid-$620s/t fob Ras Al-Khair. Ma'aden's previous DAP sale to India was in mid-October, in which IPL bought 40,000t of the product at around $643/t cfr for October loading. By Adrien Seewald Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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