Brazil is set to enter 2025 with a last-minute surge in demand for nitrogen-based fertilizers, as farmers continue to postpone purchases for the 2024-25 second corn crop.
Around 10-15pc of all fertilizer needs have yet to be purchased for the corn crop, whose planting is expected to start by February in central-western Mato Grosso state.
Brazilian farmers have been delaying agreements for inputs as they wait for lower fertilizer prices and higher grain prices. The most delayed fertilizer acquisition is urea, with buyers expecting further price drops before committing to volumes. Granular urea prices were at $359/metric tonnes (t) cfr Brazil by 19 December, $39/t above the same period in 2023.
The overall pace of input purchases is in line with farmers' buying patterns for the 2023-24 corn crop and 2024-25 soybean crop, when growers also waited until the last minute to secure final volumes.
Traditional 4Q buying surged delayed
Brazilian buyers used to speed up the pace of fertilizer purchases in the fourth quarter to supply the second corn crop. This would give them time to receive the inputs in time for application, without last-minute logistic concerns.
But unexpected changes in fertilizer price trends, combined with changes in the timing of the soybean crop, led farmers to change this buying pattern and wait as long as possible before concluding deals.
Farmers' saw this last-minute buying strategy rewarded in early 2024 when urea prices were about $393/t cfr Brazil, below levels seen earlier in October 2023.
And a delay in the 2024-25 soybean planting because of unfavorable weather conditions also contributed to postponed fertilizer acquisitions for corn, since the soybean harvest would likely be delayed and force farmers to plant corn outside the ideal period.
Those factors are set to again push final urea purchases to January. Some volumes traded in November-December may discharge in ports in January, intensifying deliveries in the first months of the year.
Brazil imported 7.6mn t of urea in January-November, 19pc above the same period in 2023. The latest lineup data from 26 December points to around 400,000t to be delivered at ports in December and 422,000t in January, according to maritime agency Unimar.
Farmers focused on acquiring ammonium sulphate (amsul) volumes in the past three months, as prices carried a discount considering the nitrogen content compared with urea while also adding sulphur. There is plenty of available compacted/granular amsul, with Chinese producers eyeing Brazil as an outlet for the product.
Imports of amsul totaled 5.1mn t in the first 11 months of the year, 18pc above the same period last year. A total of 596,000t and 1.2mn t were set to discharge in ports in December and January, respectively, according to Unimar's lineup data from 26 December.
The trend is the same in the domestic market, with purchases advancing slowly. Some cooperatives and retailers bought volumes to guarantee availability when farmers decide to buy.
Farmers are most advanced in theirs potash (MOP) acquisitions, as its lower-than-usual price has motivated farmers to buy the fertilizer for 2025-26 corn and soybeans. Market participants estimate that around 50pc of MOP needs in Mato Grosso for the 2025-26 soybean crop were purchased by early December.
Demand has been high for the first quarter of 2025, leading to expectations of intense MOP deliveries at ports. This would mean a high flow in the inland market, competing with urea volumes handling in January-February.
