São Paulo – The Brazilian market increased fertilizer imports from the Arab world by 63% from January to September this year as against last year. While in the first nine months of 2012 the country spent US$ 831.1 million with purchases of products from the region, in the same period this year they reached US$ 1.3 billion, growth of US$ 523 million.
The greater shipments came mainly from Morocco, Qatar, Egypt and Tunisia. Morocco was the main supplier of fertilizers to Brazil up to September, with US$ 797 million and growth of 38% over 2012. The second main supplier was Qatar, with US$ 272.6 million and growth of 711%, followed by Egypt, with US$ 110 million and growth of 14.7%, and Tunisia, with US$ 88.3 million and growth of 61.3%.
Morocco and Tunisia are traditional producers of phosphates, while Qatar supplies nitrogenised products and Egypt, urea. According to the executive director at the Brazilian Association of Fertilizer Mixers (AMA-Brasil), Carlos Eduardo Florence, Egypt has quality urea at a favourable price.
Tunisia has already sent more fertilizer to Brazil, but since its political turmoil, a result of the Arab Spring, the country has not returned to supplying. Heinz Huyer, the president at Intertrade Group, one of the main fertilizer importers in the country, says that purchases from Tunisia dropped to 3% of what they were before the revolution. He believes that this is the reason why other Arab countries are increasing their shipments, occupying Tunisian space.
Apart from that, more fertilizer producer countries have turned to the Brazilian market since India reduced its imports. The Asian country is one of the main buyers of fertilizers, but due to depreciation of the rupee, the Indian government has removed subsidies to phosphate imports, pointed out Florence, thus reducing local purchases.
The measure in India, in fact, has had an impact on the global market as a whole, and fertilizer prices are on the way down. Furthermore, Russian company Uralkali leaving a partnership with Belarusio na Potash Co (BPC) halfway through this year has also pushed phosphate prices down, as the companies together dominated a significant share of the global market.
In fertilizer shipments from the Arab countries to Brazil the reduction in value of the product is visible. In fact, while import revenues rose 63% from January to September, the volume has grown even further, 85.63%. This means that the country bought cheaper fertilizers from the Arabs as against the same period last year. The volume acquired in from January to September this year was 3.1 million tonnes.
But Brazil’s greater fertilizer imports are not restricted to Arab suppliers. According to figures disclosed by the Brazilian National Fertilizer Association (Anda), from January to September, the country bought abroad a 9.8% greater volume of fertilizers, a total of 16.1 million tonnes. The growth, according to Florence, is due to the greater demand for food, coming mainly from emerging nations, which has resulted in Brazil producing more agricultural commodities and thus needing more fertilizers.
According to Florence, Brazil has a limited capacity for production of fertilizer and thus needs to make use of imports whenever agricultural production rises. On average, the country produces 25% of the fertilizer it consumes, and imports the remaining 75%. In case of potassium chloride, imported products represent around 90% of the total. The urea supply is 65% foreign while 50% of phosphates come from abroad.
*Translated by Mark Ament
