Fertilizer Purchase Index remains favorable to farmers

The Fertilizer Purchasing Power Index (IPCF) for August closed at 0,99, compared to 1,50 in the same month of 2022. The scenario remains favorable to rural producers as it allows for a good exchange ratio. The indicator showed an increase in relation to the month of July due to the average drop of 2,5% in the price of the main commodities, together with the increase of more than 10% in the price of fertilizers.

The most representative drop in commodities was in the price of corn, with around -3,5%, as the Brazilian harvest brought a very large volume of product to the market, at the same time that expectations for the development of American harvests are good. The price of soybeans also remained under pressure in August, which reflects the market's good expectations about the American and Brazilian 2023/2024 harvests.

The biggest increases in fertilizer prices were recorded in phosphates, when compared to the previous month, resulting from solid demand in the Brazilian market in the face of limited availability, considering that the market was detached from other geographies with greater profitability and aligned with a window increasingly closer service due to the international supply chain.

The geopolitical conflict between Russia and Ukraine remains on the sector's radar, with the expectation of good harvests in both countries and the prospect of how agricultural products will be exported. At the beginning of September, we had an earthquake in Morocco, a country that has the largest reserves of phosphate rock in the world and is essential for the supply of phosphates to Brazil. And in the North American scenario, we have Hurricane Lee, which could bring dangerous conditions to the East coast of the United States in the coming days. The Brazilian harvest will also play a strong role in the coming months, as the climate for soybean planting is favorable so far, with the start scheduled for the first week of September.