Fertilizer Purchasing Power Index remains stable in Brazil for February

The Fertilizer Purchasing Power Index (IPCF, in Brazilian Portuguese) for February 2025 closed at 1.1, remaining practically stable compared to the previous month's 1.09, marking a slight increase of 0.6%. Despite a recovery in the prices of some commodities, the rise in the average price of fertilizers contributed to the period's result.

In February, fertilizers saw an average increase of about 3%, driven mainly by a rise in urea prices, followed by potassium chloride (KCl). According to Agrinvest data, the potential impacts of KCl taxation, which saw a 20% price increase last month, may continue to rise, as there were also price increases for MAP (monoammonium phosphate) and SSP (single superphosphate), whose import volumes are lower than the previous year.

"When the National Fertilizer Diffusion Association (ANDA) releases stock data, it will be possible to observe a correlation between low stocks and reduced imports, indicating a reduced supply and, consequently, an upward trend in prices," states Mosaic, responsible for the IPCF.

According to the authors, this price behavior was mainly driven by corn, which is in an advanced planting phase but still delayed compared to the ideal window, potentially affecting its development until the end of the cycle if the weather is unfavorable. Regions adopting two crops (summer and winter), combining soybeans in the summer and corn or cotton in the winter safrinha, have the opportunity to improve their revenue generation, contributing to the 2025/2026 harvest.

So far, the fertilizer market has been robust in 2025, with the nearing completion of the safrinha corn planting and the beginning of preparations and planning for the next summer crop, particularly soybeans. Attention is warranted for the North American crop, which is expected to have a smaller soybean area this year, according to data from the United States Department of Agriculture (USDA) Annual Forum, falling below market forecasts. This scenario could reduce the global soybean supply in 2025, contributing to a better balance between supply and demand for this crop.

Currently, the market remains attentive to weather conditions, the impacts of drought in Rio Grande do Sul, and the final pace of the harvest in Brazil, as well as potential effects on the second-crop corn planting window. This underscores the need for rural producers to conduct proper planning of their inputs.

Understanding the  IPCF

The IPCF is released monthly by Mosaic and consists of the ratio between fertilizer price indicators and agricultural commodity prices. The methodology involves comparison against a 2017 baseline, indicating that the lower the ratio, the more favorable the index and the better the exchange ratio. The IPCF calculation considers Brazil's main crops: soybeans, corn, sugar, ethanol, and cotton.

The source for calculating fertilizer prices at Brazilian ports is CRU, an international consultancy firm. Commodity prices are determined by the average Brazilian market price in dollars, based on publications by Agência Estado and CEPEA.

The fertilizer price index includes the values of MAP, SSP, Urea, and KCl, weighted by their respective usage shares in the country. The commodity index includes soybeans, corn, sugar, ethanol, and cotton, weighted by fertilizer consumption. The index is also weighted by exchange rates, considering 70% for fertilizers (cost) and 85% for commodities (revenue). The analyzed crops are soybeans, corn, sugar, ethanol (sugarcane), and cotton, with data referring to February 2025.

(Editing by Leonardo Gottems, reporter for AgroPages)