Mar 04, 2022

Brazil Worried About Fertilizer Supply Disruptions

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

Brazil's Minister of Agriculture and the Brazilian National Association of Fertilizer Distributors (Anda) disagree sharply concerning the amount of fertilizers on hand in Brazil. The Minister recently stated that Brazil's has enough fertilizers on hand to meet the demand until mid-October (8 months), while Anda has indicated that Brazil only has a 3-month supply on hand. Anda said their forecast was based on reports from market players.

The war between Russia and Ukraine has caused fertilizer supply chain disruptions from major producers like Russia and Belarus. Currently, the fertilizer market is paralyzed due to Ukraine ports being closed, sanctions levied against Russia and Belarus, and shipping disruptions in the Black Sea.

International fertilizer trade is extremely important for Brazil which is the world's fourth largest consumer of fertilizers responsible for 8% of the world's consumption. Brazil is the world's largest importer of fertilizers with 80% of Brazil's fertilizers needs being imported. Approximately 95% of Brazil's potassium needs are imported.

Russia provides 25% of Brazil's fertilizer imports along with large amounts from Belarus. Brazil imports 28% of its potassium from Russia. Brazil is the second largest nitrogen importer in the world with 21% of its nitrogen imports coming from Russia.

The crop that requires the most nitrogen in Brazil is corn and Brazil plants three different corn crops. The first corn crop, which is responsible for approximately 25% of Brazil corn production, is in the process of being harvested. The safrinha corn crop and the third corn crop in northeastern Brazil, which are responsible for approximately 75% of Brazil corn production, is in the process of being planted. As of late last week, approximately 64% of the safrinha corn was planted.

So, there appears to be enough nitrogen fertilizer on hand for Brazil's 2021/22 corn crops. The bigger concern is for the 2022/23 summer crops which farmers will start planting in August. Brazilian farmers will need to have their 2022/23 fertilizer needs on hand by August.

Brazil is urgently looking for alternatives to Eastern European fertilizers. The Minister is looking to Chile to supply more potassium and countries in the Middle East to supply more urea.