South America Calling

Brazil Fertilizer Freight Rises on Truck Shortage

Brazilian fertilizer firms are facing increased delivery costs because of a shortage of trucks at port, according to industry leaders.

A sharp decline in the flow of second-crop corn to port in July and August due to crop losses in the center-west and the buying out of export contracts by domestic corn consumers has led to a decreased flow of trucks to port, which has coincided with an increase in demand for imported fertilizer for the 2016-17 soybean crop.

With fewer trucks available to make the return trip to Mato Grosso and Goias states, fertilizer freight prices jumped by over a third compared with last year.

"We have seen an explosion of freight prices, which will have to be absorbed by someone," said George Bonifacio e Sousa, president of the Brazilian Fertilizer Distributors Association (ANDA).

Approximately 70% of all Brazilian fertilizers are imported.

Brazilian farmers have considerably increased fertilizer orders for the coming season after skimping last year. An increase in planted area has also contributed increased demand.

Brazilian fertilizer deliveries in the first seven months of 2016 were up 10% at 16.5 million metric tons.

However, fertilizer companies are concerned they will have trouble passing on the increased freight costs to farmers, whose purchasing power has been curbed by limited access to operating credit amid the continuing crisis in the Brazilian economy.

The fertilizer freight hike has not really affected the south of Brazil, where losses to the second-crop corn were limited.

Brazil is the world's biggest soybean exporter and second-largest shipper of corn.

Alastair Stewart can be reached at talk@dtn.com

(CZ)

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