Fertilizer sales up 25% in Brazil for the first eight months

Fertilizer sales in Brazil for the first eight months of 2011 continue to be very strong running at a pace 25% greater than in 2010. According to the National Association of Fertilizer Distributors (Anda), total fertilizer sales for the January-August period totaled 17.05 million tons compared to 13.57 million tons for the same period in 2010.

Fertilizer sales increases are being stimulated by strong prices for soybeans, corn, sugarcane, and coffee. In addition to expended acreage for these four crops in 2011/12, Brazilian farmers are increasing their fertilizer usage in an attempt to increase their yield per acre. They are turning their attention to making their land more productive because new regulations are making it much more difficult to open up new land in order to expand their operations.

Since most of the fertilizers consumed in Brazil are imported, fertilizer imports have increased even faster than the total sales. During the first nine months of 2011, imports are up 43% totaling 12.8 million tons compared to 8.8 million last year. The increase in imports is resulting in lengthily backups at the Brazilian ports. The Port of Paranagua in southern Brazil is the main entry point for imported fertilizers as well as the principal grain exporting port as well.

The result has been lengthily delays in both exporting the grain and importing the fertilizers. The average wait time for ships to unload their cargos of fertilizer at the Port of Paranagua is averaging about 32 days. Once the fertilizer is offloaded it still needs to be transported very long distances by truck to farmers in central Brazil. It's another example of how the lack of infrastructure in Brazil is driving up the cost of inputs as well as driving down the price of commodities.

Brazil has a national goal of becoming self sufficient in fertilizer production by the year 2020, but progress in achieving that goal has been slow. During the first nine months of 2011, domestic production of fertilizers has increased only 4.3% from 6.04 million tons to 6.30 million tons. This increase cannot even keep up with the increases crop acreage much less reducing the amount of fertilizers Brazil needs to import.