Brazil fertilizer sales rose 7% in Q1

During the first three months of 2012 Brazilian farmers have purchased 5.3 million tons of fertilizer, which is 7% more than the 4.9 million tons purchased during the same period last year.

The fertilizer was most probably used for expanding area of maize, as well as other winter crops such as wheat. Moreover, farmers are buying fertilizer for what is expected to be a record-breaking crop of soybeans in 2012/13.

Soybean prices throughout Brazil are hitting record levels and farmers have been aggressive in not only selling soybeans harvested, but also in forward contracting their anticipated 2012/13 soybean production. These sales are putting money in their pockets and they are buying fertilizers and other inputs at an accelerated pace. In Mato Grosso, for example, it is estimated that three quarters of the input needed for the 2012/13 soybean crop in the state have already been purchased.

The purchase of fertilizers in Brazil, are not uniformly higher than last year. In southern Brazil, for example, fertilizer sales have been slower than last year due to severe drought that reduced grain production in states, like Rio Grande do Sul, up to 50%. In this state, sales of fertilizers for the first three months of 2012 fell 21% compared to last year. According to the Syndicate of Fertilizer Industries in Rio Grande do Sul (SIARGS), only 260,000 tons have been sold compared to 332,000 tons during the first three months of 2011.

Combining fertilizer sales in the three southern states of Brazil, Parana, Santa Catarina and Rio Grande do Sul, during the first three months of 2012 totaled 1.0 million tons compared to 1.2 million tons sold last year. Sales should increase when they start purchasing for winter crops, especially wheat. Even if the production of soybeans and corn has been greatly influenced by the dry weather in southern Brazil, the surging commodity prices have offset much of the decline in production.

Source: AF News Análises