Argus Media Limited

10/06/2023 | News release | Distributed by Public on 10/06/2023 14:22

Brazil's Parana ferts prices outpace Mato Grosso's

MAP 11-52 prices in Brazil's import market and in Parana state topped the 18pc quarterly increase in Mato Grosso state, amid low liquidity in the central-western state, while MOP and granular urea prices also posted sharper gains in Parana.

MAP prices in Mato Grosso rose by $105/metric tonnes (t) to $685/t fob Rondonopolis by the end of September from $580/t fob Rondonopolis in late June.

Mato Grosso purchases of fertilizer to cover the soybean crop needs take place in advance and market participants were more focused on covering one-off lots and concluding deliveries in the quarter. Planting in Mato Grosso usually starts in mid-September, but this year the agriculture ministry allowed at least 216 farmers to begin planting before the end of the sanitary void, when sowing is prohibited to prevent a highly destructive fungal disease known as Asian rust.

Farmers in Mato Grosso have started to cover their needs for the 2024-25 soybean crop, with around 25pc of their needs purchased in the BR-163 highway region as of early September. In the whole state, that represents around 10pc of farmer fertilizer needs.

MAP prices increased the most in the city of Paranagua, in Parana state, amid last-minute demand to cover needs for the 2023-24 soybean crop. Market participants reported that around 5pc of fertilizer needs for the soybean crop had yet to be purchased in mid-September. Buyers reported some sellers tried to sell lots of MAP with MOP, amid tight supply of MAP and high availability of MOP.

The 28pc increase in phosphate prices in Paranagua outpaced cfr Brazil's 26pc increase in the quarter. Even so, activity in the import market remained minimal from mid-August to late September, with prices almost flat in the period, after a record 3.4mn t of imports from January-August, up by 7pc on the year.

Last minute demand for soybeans increased MOP prices more intensively in Parana state - by 10pc in the quarter - while prices in Mato Grosso and in the import market rose by 8pc each.

MOP prices held an average 15pc premium in Rondonopolis compared with Paranagua prices. But the spread was reduced to 2pc and 6pc in early September and in late July, respectively, with lower offers to attract demand.

Brazilian farmers postponed fertilizer purchases for corn in the quarter, waiting for barter rates to drop. High prices of granular urea and a decrease in corn prices in the international market move farmers away from the market. Granular urea prices rose in Parana state by 33pc to $478/t fob Paranagua. Low liquidity also prevented importers from purchases. Prices in the import market also rose by 33pc to $395/t cfr Brazil.

The gain for granular urea prices in Mato Grosso state lagged slightly, rising by 32pc to $550/t fob Rondonopolis in late September.

The spread between cfr Brazil prices and prices in Paranagua hit $85/t in the quarter, but dropped to $23/t on 3 August, following lower prices to attract demand.

Urea shifts the most

The cfr Brazil price of urea was more volatile than MAP and MOP prices.

Urea prices were at the lowest level on 6 July at $320/t cfr, among deals of at least 20,000t in that week. Prices peaked at $445/t cfr Brazil on 3 August, with new deals and as market participants waited on the Indian tender developments. India called two tenders in the quarter, which helped keep the market volatile.

In early August, MAP prices rose to $520/t cfr from $495/t cfr, marking the sharpest increase in the quarter. Prices increased after low availability. Offers were at $510-530/t cfr for September-October delivery. Buyers indicated that only one-off lots of Moroccan MAP were available for September, while Russian MAP offers were referenced for October loading.

MOP prices were mostly flat in the third quarter amid low liquidity. Large potash inventories in the country also reduce liquidity and encourage buyers to seek lower prices. Potash stocks in Brazil are now estimated at 4.1mn t, with imports from January-September nearing 9.8mn t, according to the union of agricultural fertilizer industries in Sao Paulo state.

By Renata Cardarelli and Flavia Bohone