Consultancy INTL FCStone expects a record delivery of fertilizers in Brazil in 2020. 36.6 million tonnes should be consumed this year, up 1% over last year. This is because the exchange ratio between soy, potassium and phosphorus is still the best for the past five years for the period. However, the new estimate is below the last data reported in February, where the forecast was 36.9 million tons. The perspective, according to the consultancy, considers a slight increase in the application of fertilizers in grain crops and a decrease in the application of inputs in crops that are currently devalued. “The new coronavirus pandemic has created a world of uncertainty, influencing the economic growth prospects of important consumers of the NPK complex (nitrogen, phosphorus and potassium) and of inputs”, the study revealed. The consultancy notes that, despite the current situation leading to greater volatility in the prices of the main commodities, such as grains, the sale in dollars is offsetting the fall in soybean and corn prices for the Brazilian producer. This scenario, according to FCStone’s analysis, corroborates for still favorable perspectives for the application of fertilizers in the second semester – a period in which the 2020/2021 summer crop is sown. On the other hand, the consumption of fertilizers by sectors in which prices remain at lower levels may be affected, due to the “dollarized” cost of fertilizers in the domestic market. In this sense, FCStone considers that the level of investments in fertilizers by sectors with higher production costs, such as cotton and sugar cane, tends to be affected. The consultancy also points out that factors such as the availability of public and private credit, the level of producer remuneration, the exchange ratios between fertilizers and grains and the economic reflexes of the Covid-19 pandemic should also influence the prospects for the Brazilian market. fertilizers in the second half.
Source: Canal Rural