South America Calling

Brazilian Fertilizer Sales Perk Up in January

By Alastair Stewart

After a dramatic slump in sales in 2015, Brazilian fertilizer sales recovered in January.

Deliveries reached 2.07 million metric tons (mmt) last month, up 4% on the same time in 2015, the Brazilian Fertilizer Distributors Association (ANDA) reported.

Demand was particularly strong for nitrogen fertilizer, stimulated by an expected surge in second-crop corn planting. Deliveries of this type of fertilizer were up 7.8% at 375,000 metric tons, ANDA said.

Sales of potassium fertilizers registered a 3.6% year-on-year jump to 905,000 metric tons. In the case of phosphates, there was a 9.8% reduction to 217,000 tons due to a change in fertilization for corn and lower sugarcane demand.

Mato Grosso remains the principal buyer with farmers from the state receiving 450,000 tons last month.

Fertilizer sales fell 6% last year after a devaluation of the Brazilian real of nearly 50% caused prices to jump and a tightening of credit forced farmers to reduce spending on inputs.

However, the January fertilizer delivery figures underline the return of cautious optimism among Brazilian grain farmers. Confidence has risen among farmers as it has become clear that most will make a profit out of the 2015-16 soybean crop. Celeres, a local farm consultancy, forecasts the average margin in Mato Grosso will be R$720 per hectare ($73 per acre) and in the south will be R$1,618 per ha ($163 per acre).

Meanwhile, heavy forward sales and positive margins appear to have convinced farmers to plant more second-crop corn in 2016, despite the elevated weather risk caused by expected planting delays. Celeres estimates second-crop corn area will expand by 6.9% to 24.2 million acres.

(ES)

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