The fertilizer market - Brazil

1.1 Definition and scope of study

Like many other life forms, plants need nutritional elements to ensure healthy growth and development, mainly potassium, nitrogen, oxygen and phosphorus. Fertilizers therefore consist of nitrogen, potassium and phosphorus, as oxygen is naturally present in the air. These are called chemical fertilizers, unlike natural or organic fertilizers (produced from plant or animal material). The use of fertilizers therefore refers to a fertilizing action of the soil. The aim is to increase agricultural yields to meet a global demand for food that is increasing year after year. The fertilizer market is thereby a constantly growing market.

Fertilizer application rates have slightly decreased over the last five years, as technological advances have allowed farmers to become more efficient in their distribution, reducing waste and requiring less fertilizer. Revenue from the sector has been falling at a compound annual rate of 4.1% per year for the past five years. These losses are largely correlated with fluctuations in fertilizer prices.

Brazil imports, on average, around 25 million tons of fertilizers per year, with nitrogen fertilizers accounting for around 35% of the total, phosphate fertilizers 23% and potassium fertilizers 42%. Brazil is one of the largest agricultural producers and exporters in the world, even though 80% of the domestic fertilizer market is served through imports. Nevertheless, in the last decade, there have been indications of new ventures in the nitrogen fertilizer sector, but the difficulties, associated with availability, price, international competition, as well as the volume of investments required, have delayed the advances of national entrepreneurs.