Geovana Pagel*
geovana.pagel@anba.com.br
São Paulo – The Arab countries are fundamental partners to supply the growing demand for raw materials for production of fertilizers. This statement was made by agronomist Ali Saab, of the Strategic Management Advisory (AGE) at the Ministry of Agriculture, Livestock and Supply, which has just promoted a study that diagnoses the fertilizer sector in Brazil, taking into account the offer, demand, prices and concentration of produce. The study estimates that the country should consume 30.6 million tonnes of fertilizers in 2016. Of this total, around 21.3 million tonnes should be imported.
"Morocco, Algeria, Tunisia, Syria, Jordan, Saudi Arabia and the United Arab Emirates are among the most important global producers of raw material for fertilizers," pointed out the AGE advisor. According to Saab, in terms of phosphorus reserves, or phosphoric rock, much used in the production of fertilizers, Morocco is the world leader with 21 billion tonnes of reserves. Jordan has 1.7 billion tonnes, Syria, 800 million tonnes, Egypt, 700 million tonnes and Tunisia, 600 million tonnes.
"That is, 50% of the global phosphorus reserves are in the Arab nations. This makes them important partners and suppliers of raw materials to Brazil," evaluated Saab. According to him, apart from the world leader in phosphorus reserves, Morocco is also a great producer of sulphuric acid, with production of 11 million tonnes.
Another example mentioned by Saab is sulphur, a fundamental raw material for the production of phosphoric acid, much used in making fertilizers. Saudi Arabia produces 2.7 million tonnes of sulphur. The United Arab Emirates, in turn, produce 2.06 million tonnes. "These three companies are responsible for 10% of sulphur production in the world. As Brazil does not produce sulphur, this makes them important partners for the country," he guarantees.
"In the case of potassium reserves, Jordan has 580 million tonnes and is starting to supply potassium to Brazil," finished off the advisor.
The Brazilian market
Brazil consumed around 24.5 million tonnes of fertilizers in 2007. However, national production was just 9 million tonnes. Apart from that, the country produces just 10% of the potassium it consumes and Sergipe (NE) is the only state that produces this mineral. "Phosphates are abundant ores in Brazil, but it has been over 10 yeas since a license was last granted to explore these ores," pointed out Saab.
According to the figures of fertilizer sector industries, soy, maize, sugarcane and coffee are the cultures that use fertilizers the most in Brazil. Among the states, Mato Grosso is the main consumer, with around 16.5% of the national demand, followed by São Paulo (15.6%), Paraná (14.1%), Minas Gerais (12.3%), Rio Grande do Sul (11.3%), Goiás (9.0%) and Bahia (6.3%).
The ministry research calls attention to the increase in the prices of basic raw material for production of fertilizers, urea, ammonium phosphate, potassium chloride and simple super phosphates. According to the study, potassium chloride and ammonium sulphate price changes reached 80% last year and the cost of simple super phosphates reached 95%.
Still in reaction to high fertilizer prices, the study also warns to sector interference by future oil prices, as well as the impact of greater foreign demand. "These increases will affect both raw materials and the cost of maritime and highway transport," warns Saab. He forecasts that the impact should be negative for the trade balance surplus, as imports of these inputs and raw materials should be around US$ 8 billion in 2016.
The analysis of figures calls attention to the existence of raw material whose production is concentrated in the hands of a reduced number of companies, in several cases reaching 100% in production in the hands of just one group. And there are just three companies trading fertilizers in the country, showing "great share concentration in the fertilizer productive sector, in which decision making is in the hands of three large groups (Bunge, Mosaic and Yara)," says Saab.
The study also points out the importance of increasing production of fertilizers. To Saab, this increase in capacity would bring great benefits for competition on the consumer market. "The corporate sector and other producer organisations can develop such an enterprise," he finished off.
According to the agronomist, the Ministry is studying the possibility of simplifying the assembly of fertilizer factories by cooperatives, providing specific financing lines for the purchase of capital goods and also for the import of raw materials.
The complete study should be published in the next edition of the Agricultural Policy Magazine, published by the Agricultural Policy Secretariat at the Ministry and the Strategic Management Secretariat.
Contact
www.agricultura.gov.br
*Translated by Mark Ament