Bolivia increases urea exports to Brazil

Bolivia increased its granular urea exports to Brazil after production began at the state-owned YPFB plant in the Bulo-Bulo municipality last year.

YPFB exported its first urea shipment to Brazil in November, and it arrived at the Mato Grosso do Sul city of Corumba at the end of January. Brazil imported about 24,200t of urea from Bolivia in March-April, according to the Ministry of Industry, Foreign Trade and Services (MDIC).

But MDIC's figures do not include purchases that began in late January or early February, which would equate to 55,000-60,000t of imports during January-May, according to market participants. Several participants said Brazil's customs systems takes up to three months to register import volumes after the product has entered the country.

YPFB signed an initial agreement last year to export 350,000t of urea to Brazil via Switzerland-based trading company Keytrade AG, which will be responsible for storage and distribution in Mato Grosso and Mato Grosso do Sul. The companies signed an addendum to the contract that allows the supply of an additional 50,000 t/yr.

The Bolivian producer wants to increase its exports to Brazil and the rest of Latin America as production at the 700,000 t/yr unit is currently underutilized. Bolivian demand is 15pc of the YPFB's production capacity, according to local government estimates.

YPFB recently signed a deal to supply 100,000t of urea with Singapore-based trading firm Dreymoor for distribution in Argentina and Paraguay. Market participants said that YPFB may open negotiations with other companies in Brazil and the rest of Latin America to expand its exports, but the volumes available for new contracts are low.

Market participants estimate that YPFB will gradually increase production and shipments this year, which may lead to additional exports.