Brazil is experiencing a significant increase in fertilizer imports driven by favorable exchange rates and proactive purchasing by producers. A Rabobank survey reveals an increase in early purchase volumes compared to previous years. The rise in imports of various fertilizers, particularly monoammonium phosphate and single superphosphate, suggests strategic purchasing behavior in response to market conditions. Experts predict continued tight margins and high phosphate costs throughout 2025.
Brazil is experiencing a notable acceleration in fertilizer imports, a trend not observed since the chaos caused by Russia’s invasion of Ukraine in 2022, which had led to skyrocketing prices. Favorable exchange ratios between grains and fertilizers have incentivized producers to boost their import activities.
A recent Rabobank survey indicates that from November 2024 to January 2025, producers procured 18% of the total fertilizer volume anticipated for the 2025/26 crop season. This figure compares favorably to the previous cycle, where early purchases accounted for only 8%. Notably, in January, acquisitions constituted 7% of projected volume, an increase from 5% the prior year.
Bruno Fonseca, an input analyst at the Dutch agribusiness bank, highlighted that, “At the end of last year, sales of potassium chloride rose sharply because prices were very attractive, and there were expectations of a slight increase.” He noted, however, that purchasing for other nutrients like phosphorus was less vigorous due to higher prices, a trend anticipated to continue.
Consulting firm Argus has also noted a marked increase in imports of monoammonium phosphate (MAP), which is essential for soybean, corn, and wheat production. In January, Brazil imported 283,300 tonnes, nearly double the 144,100 tonnes from January 2024.
Argus forecasts ongoing increases in imports but expects that purchases will remain strategic and linked to input price attractiveness. This proactive approach will enable importers to navigate exchange rate fluctuations, a pivotal factor in deciding on foreign purchases.
One fertilizer gaining traction is single superphosphate (SSP), which serves as a MAP alternative in soybean cultivation. Argus predicts a potential rise of 18% to 23% in SSP imports in the near future, primarily due to a more favorable exchange ratio compared to other fertilizers.
Producers are acting decisively to benefit from optimal exchange conditions. Luiz Pedro Bier, vice president of Aprosoja Mato Grosso, noted that price lock-ins for the 2025/26 soybean crop are already occurring in response to favorable dollar conditions, despite a downward trend in soybean prices on the Chicago Board of Trade.
According to Mr. Bier, while soybean prices are decreasing, the U.S. dollar’s appreciation is likely to provide net benefits in grain export revenues. “A strong dollar means slightly higher revenues from grain exports, but it also significantly raises input costs,” he remarked.
Industry insiders report that producers are increasingly scouting for favorable purchasing terms. Cooperatives are implementing aggressive sales strategies and offering attractive terms for fertilizers ahead of the second crop planting season. The replenishment of input retailers will hinge substantially on any decline in the dollar’s exchange rate.
Experts concur that tight margins and elevated phosphate costs are expected to persist throughout 2025, influencing financial decisions across the supply chain.
In summary, Brazil’s fertilizer imports are surging, driven by favorable exchange ratios and proactive purchasing strategies by producers amid tightening supply chain conditions. Import activity has markedly increased for both potassium chloride and monoammonium phosphate, with expectations of strategic imports of single superphosphate. Despite potential price declines in soybeans, favorable dollar conditions are influencing financial planning and purchasing strategies for the upcoming crop seasons.
Original Source: valorinternational.globo.com
