Brazilian fertilizer producer Rifertil filed for bankruptcy protection from creditors, citing a debt load inflated by currency impacts, falling prices and tough sector conditions caused by drought last year.
Rifertil's debts total R647.9mn ($112.7mn), according to a document seen by Argus, which was filed with the civil court of Rio Verde, in central-western Goias state. The request, also confirmed by the office of the company's attorney, was filed on 22 April and is now awaiting analysis by the Goias court.
The bankruptcy protection filing highlights that the fertilizer sector has been facing difficulties since 2022, when nutrient prices were high because of the Covid-19 pandemic and, later, because of the beginning of the conflict between Ukraine and Russia.
At that time, predictions such as a shortage in the global fertilizer market contributed to an increase in fertilizer prices. But the forecasts did not materialize and prices fell in the following months, causing losses that have hit the company's cash flow since then.
The document also highlights problems faced by producers in Goias, the company's main market and headquarters. Between the last quarter of 2023 and the beginning of 2024, many cities in Goias declared states of emergency because of drier than usual weather conditions. This contributed to a lack of liquidity for producers, hurting Brazil's agribusiness, especially from an increase in defaults from customers.
Rifertil's attorney also said that the US dollar's strengthening to the Brazilian real throughout the second half of 2024 inflated the company's debt, since many products and services in the fertilizer sector are traded in US dollars.
The company was founded in 2000 and its headquarters is in Rio Verde city, in Goias. It also has factories in Catalao city, Goias, and Maruim city, in northern Sergipe state. The three units' combined capacity is of 750,000 metric tonnes/yr.
