Record Harvest to Drive Fertilizer Sales Growth in Brazil

Brazil’s fertilizer industry anticipates growth driven by a record harvest, with expected deliveries reaching 46 million tonnes in 2024. The National Supply Company forecasts a 9.4% increase in grain production for the 2024/25 cycle. Improving exchange ratios and stable raw material prices enhance the viability of fertilizer demand, particularly among soybean and corn farmers, who constitute a significant portion of the market.

The fertilizer industry in Brazil is poised for growth, largely driven by a projected record harvest this year. Eduardo Monteiro, the head of Mosaic’s operations in Brazil and Paraguay, indicates that the historic harvest will increase demand for nutrients in the upcoming planting season, as farmers replenish the soil after extracting more nutrients.

In 2024, fertilizer deliveries are predicted to reach 45.6 million tonnes, marking the second-highest volume ever recorded. Monteiro is optimistic that this number could increase up to 46 million tonnes, potentially establishing a new record.

The National Supply Company’s February forecast estimates Brazil will produce 325.7 million tonnes of grains in the 2024/25 cycle, which would reflect a 9.4% rise over the previous year. The highest production on record was in the 2022/23 season, totaling 322.8 million tonnes.

An additional contributing factor to the increase in fertilizer sales is the improved exchange ratio between grains and inputs observed this season. Although soybean prices on the Chicago Board of Trade have dropped 3.1% recently, they remain 0.5% higher than six months ago. Corn prices have seen a 2.8% decline in the past 30 days; however, they have surged over 13% within the last six months.

Soybean and corn farmers represent 60% of Brazil’s fertilizer demand. Monteiro suggests that the rebound in corn prices indicates strong profitability for farmers alternating between growing soybeans and corn. Moreover, he notes that prices for critical raw materials within the fertilizer sector have either stabilized or decreased since last year.

The Brazilian fertilizer industry is on the verge of significant growth due to a record harvest anticipated for this year. The increase in nutrient demand, favorable grain pricing, and stable prices for raw materials are driving this trend. Ultimately, these factors are expected to contribute to noteworthy profitability for farmers within the sector.

Original Source: valorinternational.globo.com