Fertilizer production trends in Brazil

In the last decade, fertilizer production in Brazil decreased from 9,81 million tons in 2007 to 8,184 million in 2017. In contrast, fertilizer deliveries increased considerably in this period, going from 24,61 million to 34,4. 39,8 million tons, an increase of XNUMX% according to Anda.

There is no direct relationship between the decrease in fertilizer production and the increase in inputs sold by Brazilian agriculture. However, it is necessary to reflect on the reasons why fertilizer production fell in the country, in contrast to the increase in the use of these fertilizers.

Currently, Brazil is responsible for around 7% of global fertilizer consumption, behind only China, India and the United States. Unlike the largest markets, the main nutrient applied in Brazil is potassium, with 38%, followed by calcium, with 33%, and nitrogen, with 29%. The largest Brazilian agricultural crop is soybeans, which require more than 40% of the fertilizers applied.

Due to several factors, such as market concentration, unavailability of natural resources, and tax issues, more than 70% of all fertilizers offered in Brazil are imported, with potassium chloride being the product with the greatest external dependence, with 95 %, followed by 83% in nitrogen and 60% in phosphate.

In relation to taxation, we can highlight that discrepancies between state ICMS (Tax on Circulation of Goods and Services) rates also harm national fertilizer production. An example is double taxation when sales involve two states, while tax collection does not exist if the business is carried out within the same State. Adding to this, imported fertilizers are exempt from taxation, thus creating unfair competition in relation to national production, even after generating, in some cases, tax credits for the buyer of local products.

Dividing the explanation of production by nutrient into nitrogen, the installed manufacturing capacity of the two main finished fertilizers (urea and ammonium nitrate) has undergone practically no change in relation to its installed capacity in the last fifteen years. In relation to potassium, there has been, in the last decade, a lack of investment in the sector, which has had a direct impact on domestic production, which, in recent years, has suffered the greatest reduction among all nutrients, with only around 500 thousand tons of potassium per year. product.

Phosphate production follows a different rhythm than the others. In addition to being the input with the least import (around 40% is manufactured in the country), manufacturing has remained practically unchanged in the last decade and a half, with approximately 2 million tons of nutrients per year. Brazil is also undergoing several contributions aimed at increasing the production of this raw material, such as the Serra do Salitre Mineroindustrial Complex (CMISS), which has contributions of R$ 2,6 billion and is one of the largest private investments underway in the country , allowing Brazil to replace the import of 400 thousand tons of phosphate fertilizer per year. The mining phase will begin in the second half of 2018 and the operation of the chemical plants in 2019. There are also investments of R$ 1,5 billion in the duplication and modernization of fertilizer mixing and production plants in Rio Grande (RS).

Still regarding phosphate production in the country, currently, the share of SSP (simple superphosphate) continues to be greater, compared to other phosphates, at 46%. The increase in the production of MAP (monoammonium phosphate) and TSP (triple superphosphate) in Brazil increased the share of these two products to 31% and 20%, respectively.

The development of the agricultural sector in Brazil is continuous, and the increase in the use of fertilizers is significant, due to the productive potential of these inputs. In this way, growth strategies in the national market, such as expansions and construction of factories, help reduce Brazil's dependence on imported fertilizers, helping agriculture and the national economy to produce in a more profitable and sustainable way.

Priscilla Richetti*

Priscilla Richetti*