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Viewpoint: High stocks may cap 2020 Brazilian ferts

  • Spanish Market: Fertilizers
  • 03/01/20

Brazilian fertilizer prices may rise in early 2020 as high soybean and corn prices at CBOT drive more acreage, but it may not be enough to halt the freefall in MAP prices.

Brazil is one of the few major agricultural producers that did not face significant problems in the latest growing season. In the US, Brazil's biggest competitor for grain markets, unfavorable weather conditions during much of November prevented fall fertilizer applications, keeping inventories high. Some market participants do not expect improvement before spring application begins.

Weather issues also affected demand in India and Australia, and China bought less fertilizer because of African swine fever (ASF).

While fertilizer demand has been falling, global production capacity has increased, especially in North Africa, a region closer to Brazil than other fertilizer producers.

With scant demand everywhere else, fertilizer producers delivered more products to Brazil during 2019. As a result, MAP prices fell more than 30pc from a three-year high at the end of 2018 to their current spot at an 11-year low.

In Brazil, MAP imports were on track for a record year in 2019 of around 4mn t. In January-October 3.3mn t were delivered, just 382,000t less than total 2017 imports — which were the highest ever recorded, according to data from the Global Trade Tracker (GTT). A market participant calculates the MAP inventories are around 1mn t, double 2018's levels, and the highest registered.

Nitrogen and potash imports also grew in Brazil this year, with the arrival of the first Iranian nitrogen cargoes and growing Argentian imports pressuring cfr prices. Dutch bank Rabobank estimates Brazil's 2019 fertilizer imports will reach 28.3mn t, 800,000t more than 2018. Even though it projects higher demand for 2019 — 36.2mn t versus 35.5mn t in 2018 — inventories should increase 600,000t to 6.1mn t. For 2020, Rabobank calculates total Brazilian fertilizer inventories of 6.2mn t and 37mn t of demand, a sign that cfr prices may remain low.

Globally fertilizer producers announced output cuts in 2019 in an attempt to contain falling prices. The largest Chinese phosphate producers, known as "2+6", should reduce exports by 40-50pc between October 2019 and April 2020. Major MOP producers started announcing cuts in August, with cuts from Mosaic, Nutrien, K+S totally around 1.6mn t.

The cuts may not be enough to support falling prices in the Brazilian market, though. A market participant said the potash producers are looking for close deals for the 2020-21 season as soon as possible, a sign they expect further declines in the future. Offers for MOP for May loading were around $260/t cfr Brazil in December.

Forecasts by Sindiadubos, a fertilizer industry association, based on data from Brazil's national fertilizer industry association, Anda, indicate 10.5mn t of MOP imports in 2019, higher than the 10.01mn t seen in 2018.

An increase in product from Eurochem, the Russian firm that controls Brazilian Fertilizantes Tocantins, has also pressured prices. The return of higher output from K+S' Bethune mine is also competing with existing suppliers.

Imports from Russia have risen by over 12pc on the year, the highest increase from any country.

For nitrogen, the price reaction could appear earlier, but market participants do not expect a significant rise. An increase has already been noticed in the US and Arabian Gulf, and it should lead to higher prices in the Brazilian market in January. High stock levels, estimated by one market participant at around 1mn t, may limit that increase.

For MAP, the situation is not better. Suppliers claim that there is no demand for the product in Brazil currently. Consulting INTL FCStone said it expects a spike in MAP prices in the first quarter of 2020, but it will be limited as well.

By Kauanna Navarro


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22/11/24

Bangladesh issues new phosphate tenders

Bangladesh issues new phosphate tenders

London, 22 November (Argus) — Bangladesh's ministry of agriculture has issued a new private-sector tender to buy DAP and TSP, closing on 27 November. The ministry did not specify the total quantities sought but specified that each private importer can offer a maximum of 30,000t of TSP and 40,000t of DAP in the tender. The cargoes offered under the tender are to be shipped by 30 December, and nominated importers must issue letters of credit within seven working days of receiving the work order. The ministry closed a private-sector tender to buy DAP and TSP on 18 November and has probably awarded at least 40,000t of Moroccan DAP at $678.40/t cfr in the tender. It had received offers for 120,000t of DAP at prices ranging from $678.40-711.00/t cfr and 113,000t of TSP at prices ranging from $561.90-585.00/t cfr. BCIC seeks 10,000t of phosphoric acid in tender Bangladeshi state-owned importer BCIC has issued a fresh tender to buy 10,000t of phosphoric acid containing 52-54pc P2O5, closing on 8 January. It wants the cargo to be shipped within 30 days of issuing the letter of credit for delivery to Chattogram. Trading firm Sun International submitted the only offer in BCIC's 20 November tender for 20,000t of the same grade of acid. It offered South African or Chinese acid at $620.87/t cfr (equivalent to $1,150-1,194/t P2O5 cfr), or $530.87/t fob. In its 18 November tender to buy 10,000t of 52-54pc P2O5 acid, BCIC received offers of $1,163-1,213/t P2O5 cfr equivalent. By Tom Hampson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Indian NP/NPK stocks drop to below 3mn t


21/11/24
21/11/24

Indian NP/NPK stocks drop to below 3mn t

London, 21 November (Argus) — India's domestic sales of NP/NPK fertilizers have continued to outpace both production and imports, leaving stocks below 3mn t for the first time since February 2023. Domestic sales of NP/NPK under the country's direct benefit transfer system amounted to 1.47mn t in October, up by 45pc on a year earlier. Sales from April-October — the first seven months of India's 2024-25 agricultural year — totalled 8.72mn t, up by 23pc on the year. Domestic NP/NPK production rose by 15pc on the year to 867,900t last month, putting April-October output at about 6.25mn t, up by 11pc on the year. NP/NPK imports in October amounted to 183,000t, up by 51pc on October last year. April-October imports amounted to 1.28mn t, down by 10pc year on year. The data imply total NP/NPK stocks in India of about 2.93mn t at the end of October, down by 12pc on the month and down by 15pc on the year. By Nykole King Indian NP-NPK stockbuild mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Elevated nitrate levels found in Iowa water: EPA


20/11/24
20/11/24

Elevated nitrate levels found in Iowa water: EPA

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Cameroon's CNPC-C issues NPK tender to buy


20/11/24
20/11/24

Cameroon's CNPC-C issues NPK tender to buy

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Major amsul producers increase pricing for 1Q


19/11/24
19/11/24

Major amsul producers increase pricing for 1Q

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