Last-minute demand to cover fertilizer needs for the 2023-24 soybean crop in Brazil boosted MAP 11-52 prices in the national import market and in Parana state by 12pc, topping the 6pc monthly gain in the Mato Grosso state market, where most farmer needs have already been purchased.
Demand for fertilizers picked up in Parana, the second largest soy producing state after Mato Grosso, in August, as proximity to Paranagua port — the main entry hub of fertilizer imports into Brazil — favors last-minute negotiations. In early August, approximately 20pc of fertilizers needed for the 2023-24 soybean crop had yet to be purchased in Parana. Fertilizer prices increased by $65/t in Paranagua and by $58/t in the import market in August.
Lineup data show that around 389,600 metric tonnes (t) of MAP were discharged in Brazilian ports in August, below the monthly average of 405,570t imported from January-July. With most fertilizer needs covered in Mato Grosso during August, market participants in the state focused on fertilizer deliveries, given that planting starts in September. Around 4pc of the needs had yet to be purchased in Mato Grosso in mid-August.
In the first week of August, MAP 11-52 prices climbed by $18/t to $640-645/t fob Rondonopolis, amid demand for future deliveries. An estimated 10pc of fertilizers needed for the 2024-25 cycle had been traded. During the month, MAP prices rose by $40/t in Rondonopolis.
MOP prices moved unevenly compared with import and inland prices. Import prices increased to $360/t cfr Brazil at the end of August, from $352/t cfr Brazil in the last week of July. The trend was similar in Mato Grosso, with prices increasing by $33/t to $508/t fob Rondonopolis. On the other hand, prices in Paranagua decreased by $9/t to $420/t fob Paranagua.
Urea drops more intensively in Brazil's import market
Import and domestic prices of urea were in a downward trajectory in August, but price declines in the import market were at12pc, steeper than the 9pc drop in Parana and the 8pc decline in Mato Grosso.
Urea prices advanced in Brazilian ports in the first week of August, amid deals and expectations for an Indian tender to be issued. But prices decreased in the week following the tender's progression. The large volume offered to meet Indian demand exerted downward pressure on prices in the Brazilian market.
Indian agency IPL received offers for 3.3mn t of urea, counterbid 2.77mn t and secured 1.85mn t at $399/t cfr west coast and $396/t cfr east coast — the lowest offers level.
After the tender's conclusion, prices decreased in Brazilian ports. That led to a $60/t monthly decrease in urea prices. Nitrogen prices also fell in the domestic market, declining by $40/t in Paranagua and by $45/t in Rondonopolis during the month, following the trend in the import market and amid low liquidity.
Slower fertilizer purchases are related to barter rates that are less favorable for farmers and sales of agricultural output. Farmers have been postponing purchases of fertilizer for the corn crop as they wait for lower barter rates. Sales of the 2023-24 crop in Mato Grosso are slower than in the previous season, with 6.6pc of production sold, 5.3 percentage points behind the previous cycle.
