Oct 23, 2014

Port of Paranagua Increasing Capacity for Importing Fertilizers

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Imported fertilizers continue to pour into Brazil which is expected to import a total of 22.8 million tons of fertilizers in 2014 for a new record. That is the assessment of Paulo Cesar Medeiros Pereira from the consulting firm Sindadubos. At the end of September, Brazil had already imported 17.9 million tons of fertilizers for the first nine months of the year, which is 10.8% more than during the first nine months of 2013.

The Port of Paranagua is the principal entry point for imported fertilizers accounting for 40% of the total. The port is preparing for even more imported fertilizers as Brazilian farmers continue to increase their agricultural production. Before the end of the year, one of the two fertilizer berth will be dredged and the wharf will be reinforced. In 2015 the port will add a third berth dedicated solely for fertilizer imports thus increasing the port's capacity by 50%.

Imported fertilizers account for 75% of the fertilizers consumed in Brazil. While the amount of imported fertilizers increased during the first nine months of the year, domestic fertilizer production in Brazil declined 7.4% during the first nine months to 6.5 million tons.

Thus far in 2014, the sale of nitrogen fertilizers increased 6.2% due to the increased demand from safrinha corn, cotton, coffee, and wheat. Phosphate fertilizer sales increased 3% due to increased soybean acreage and potassium fertilizer sales were up 9% due to the demand from safrinha corn, cotton, wheat, and soybeans.

The Brazilian government embarked on a program several years ago to become self-sufficient in fertilizer production by the year 2020. The goal of self-sufficiency was to be achieved by opening new mines and building new nitrogen production facilities. The original goal was already optimistic given the rapidly expanding agricultural production in Brazil and that goal now seems further away than ever with the decrease in domestic production in 2014. As a result, the important agricultural sector is now even more dependent on the volatile international fertilizer market.

The four principal sates for fertilizer sales in Brazil are Mato Grosso with 4.7 million tons sold thus far this year, Parana with 3.1 million tons, Rio Grande do Sul with 2.9 million tons, and Sao Paulo with 2.7 million tons.