RC: Hello and welcome to ‘Market Talks’- a series of podcasts presented by Argus addressing the events impacting commodities and the energy sector in Brazil and the world. My name is Renata Cardarelli, editor of the Argus Brazil Grains and Fertilizers publication. In today's episode, I’ll chat with Gisele Augusto, senior report for Argus Brazil Grain and Fertilizers, about the fertilizer scenario in Brazil and market expectations. Welcome Gisele.
GA: Hi, Renata. It's a pleasure to be here.
RC: Gisele, purchases of nitrogen fertilizer in the domestic market to meet the 2024-25 second corn crop were postponed to January. Is this movement not usual for the period?
GA: This movement was not common for the period until about two years ago, when the buying pattern of Brazilian farmers changed. Until then, farmers anticipated fertilizer purchases for the country's main crops, in this case soybeans and corn, ensuring that the input would arrive on time at fields and without the risk of logistical problems. However, constant variations in prices, especially nitrogen, and grain and fertilizer prices below expectation by farmers meant that input purchases were postponed as much as possible, in the expectation of more attractive prices for farmers. And that's exactly what happened in the 2024-25 season. Nitrogen purchases that would usually be more intense in the fourth quarter of 2024 were postponed to January 2025, with buyers expecting lower urea prices at the beginning of the year, as recorded in early 2024.
RC: So, how did the urea market look in January and what is expected in the coming weeks?
GA: Urea imports rose by 14 percent to 8.3mn t in 2024 compared with 2023. Lineup data points to five hundred 71,000t in January as well. However, nitrogen prices in early 2025 trended upwards in the import market, opposite to buyers’ expectations, and indications reached up to 410 dollars per ton cfr. Much of this reflects the narrowing of the purchasing window for the 2024-25 second corn crop and constraints on global urea supplies, with Iran reducing production because of natural gas redirection and after India failed to meet its purchase target in the tender that ended on 2 January. India ended up securing less than 20pc of its target. Part of the volumes imported in the fourth quarter of 2024 were nationalized and offered to the market on a DPU basis. The availability of product already in the country also helped reduce the pace of negotiations on a cfr basis. Now, with the planting of the second corn crop in the early stages in some regions and with the input purchase window for corn closed, urea prices in the import market may experience downward pressure.
RC: What should farmers' position be now that the nitrogen purchasing window is closed?
GA: Farmers are starting to look to phosphates, with SSP purchases reported in the domestic market, both from local production and imports. The price of SSP for imports is firming, especially after the sale tender by the Egyptian producer NCIC, which had prices estimated at $195/t fob. Buyers from Brazil’s Mato Grosso state are purchasing domestically produced phosphates to begin meeting their needs for the 2025-26 soybean crop, which should be start planting in the state as of September. There is also demand for the NPS 08-40+5S, an alternative to the use of Chinese NPs such as the 11-44. The availability of MAP 11-52 for import is restricted, with only volumes from Russia and, to a lesser extent, Morocco referenced.
RC: In addition to SSP, what other fertilizers have been the focus of Brazilian importers?
GA: Since the end of the third quarter of 2024, Brazil has been importing high quantities of potash. The volume fell by 24pc in December from December 2023. Still, Brazil imported a record volume of more than fourteen million tons. Producers have only spot volumes for February, while offers for March are indicated at $320/t cfr. Suppliers expect levels to rise to $350/t cfr in June, given the ongoing demand for the fertilizer. Market participants estimate that more than 60pc of potash needs for the 2025-26 soybean crop in Mato Grosso have already been purchased. In addition to potash, at the end of 2024 we saw a movement to acquire compacted amsul for delivery between May and August to attend the 2025-26 crops. At that time, offers for future shipment were quoted at the same level as the spot market, which attracted buyers. We are now in a period of lower demand, considering that there is still a wide window to acquire inputs for the next crop, but the price of the nitrogen point below urea attracts buyers, even more considering that amsul contains sulfur. The last few years have seen an increase in amsul consumption at the expense of urea and the same is expected for 2025. In 2024, sulfate imports rose by 19pc on the year to 6.1 million t compared with 5.1 million t in 2023.
RC: Another year of new challenges and expectations ahead. Thank you, Gisele.
This and other episodes of our podcast are available on the Argus website at www.argusmedia.com. Visit the page to follow the events that affect global commodity markets and understand their developments in Brazil and in Latin America. We'll be back soon with another edition of “Market Talks”. See you soon!
