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Brazil’s fertile fertilizer market

January 2, 2022
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Why this is important to Wisconsin businesses: Wisconsin agrochemical companies have a large potential market in Brazil—the world’s fourth largest consumer of fertilizer nutrients.

Agribusiness is one of the main drivers of the Brazilian economy and has been increasing its exports to feed the world. The Brazilian agricultural sector has become a world agricultural leader, with investments in science and technology. Agriculture in Brazil is characterized by large-scale operations, abundant natural resources, extensive use of state-of-the-art production technology and modern farm management, which have been fundamental for the country to discover its agricultural potential and increase its production.

Exports in 2021 totaled $72.7 billion USD by August, an increase of 19.9% compared to the same period in 2020. In July 2021 alone, Brazilian agricultural exports reached $11.3 billion USD, which amounted to a surplus of $10.1 billion USD in the agribusiness trade balance. Soy, corn and sugarcane currently account for more than 60% of the gross value of agriculture in Brazil.

Brazil is the world’s fourth-largest fertilizer consumer, behind China, India and the U.S., and the growth in demand has surpassed the world growth rate.

The Brazilian fertilizer market is segmented by product (nitrogen-, phosphate-, or potassium-based; secondary nutrient fertilizers; and micronutrient fertilizers) and application (grains and cereals, oilseeds, cash crops, fruits and vegetables).

Brazil produces only 2% of the world’s fertilizers and thus is highly dependent on importing these products, leaving farmers vulnerable to price increases. Brazil imports 94% of its potassium, 76% of its nitrogen—used heavily on cornfields—and 55% of its phosphorus. Brazilian fertilizer imports exceeded 24 million tons in the first nine months of 2021, according to the Secretariat of Foreign Trade at the Ministry of Economy in Brazil. That was 13% higher than the same period last year. Brazilian imports of potassium chloride in the period were 8 million tons, a growth of 9%. Urea imports from January to September totaled more than 5 million tons, 10% higher than during the same period last year.

Brazilian demand is concentrated mainly in the second half of the year, while other major buying countries concentrate their purchases in the first half due to their agricultural calendars, which allows Brazil to have some bargaining power.

New product launches, partnerships and acquisitions are the main strategies adopted by leading companies in the Brazilian fertilizer market. Several companies also are pursuing joint ventures that are likely to increase their market share.

The potential for expandable farmland, growing demand for micronutrient fertilizers and government subsidies are the main factors driving the growth of this market. Currently, 41% of the total land is occupied by agriculture. Being a major agricultural producer, Brazil offers many opportunities for agrochemical companies.

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