Fertilizer Price Declines Boost Brazilian Soy and Coffee Farmers

Brazil: Brazilian farmers are currently enjoying reduced fertilizer import prices, stemming from the 2022 sanctions imposed on leading producers Russia and Belarus. For Brazilian growers who rely on key staples such as coffee and Soybeans, this has resulted in a notable increase in purchasing power for vital inputs like urea and the NPK fertilizer mixture, featuring key elements like Nitrogen, Phosphorus, and Potassium.

In Mato Grosso, the country's premier grain state, farmers required roughly 17.19 60-kilo bags of Soybeans to purchase a single tonne of NPK fertilizers as of the final week of March. While this is slightly higher than the end of February by approximately 0.7 bags per tonne, it is significantly lower than the 27.44 bags per tonne required a year prior.

Brazilian Arabica coffee farmers can now buy one tonne of urea fertilizer for the equivalent of 1.8 bags of coffee, which is the lowest ratio seen in the past 8 years, thanks to higher international coffee prices and lower nitrogen fertilizer costs. This drop in fertilizer prices is benefiting all domestic farmers, even as commodity prices like Soy have decreased in recent days.

The Brazilian government has expressed interest in reducing the country's dependence on fertilizer imports, and this stance has led to renewed focus on a Potash mining project in the Amazon and the development of a new Phosphate mine in southern Brazil. There is also a chance that state-run Petrobras will resume large nitrogen fertilizer projects. According to the report, fertilizers contributed to 49% of the production cost for the Soybean crop in Mato Grosso in 2022/23. However, it is anticipated that this percentage will decrease to 46% in the coming season.