The Fertilizer Purchasing Power Index (IPCF) for April 2024 reached a value of 0,99. This result represents a drop of 3% compared to last month, when the index reached 1,02. The moment is favorable for purchasing the input, since the lower the indicator, the better the exchange ratio for the rural producer. In comparison with April 2023, there was an increase of 1%, still signaling a positive trend and reinforcing the potential for continued growth in the agricultural sector.
The average price of fertilizers therefore fell by around 2%. The drop was led by urea (-14%). There was an increase in MAP (+1%) and MOP (+1%), while SSP remained stable in relation to the previous month. On the other hand, commodity prices rose around 2% on average compared to March. The increase was led by sugar cane at approximately 3%, followed by soybeans with an average appreciation of 2%. In the case of oilseeds, prices fluctuated a lot during the month, but ended with higher values, due to the rains in Rio Grande do Sul, which put at risk part of the 23/24 harvest, still in the harvest phase in the state.
The biggest drops were for cotton (-6%) and corn (-4%). During the month, there was even a recovery in grain prices, as corn has suffered from some diseases in Argentina, such as leafhopper, which can compromise productivity, and the not-so-favorable news about the climate in the American Midwest. However, these two scenarios have not yet materialized and the market has self-regulated with positive news about the Brazilian harvest.
Exchange rate variations are also considered when calculating the index, so it is important to highlight that, in the period observed, the dollar rose almost 3% at a time of greater risk aversion, reaching levels above R$ 5,10, which had not been seen in the past. some months.
The delay in fertilizer purchases represents a point of attention for the period of high seasonality in deliveries, especially the third quarter. This concern is due to the potential logistical increase in ports, with the increase in waiting lines for ships, and also due to the accumulation of road freight for hospitalization and delivery of fertilizers. Concerns about logistical movements are also reinforced, mainly due to the uncertainties linked to the Port of Rio Grande (RS) in the flow of receipts, which could have an impact on other ports.
The market is now paying close attention to planting in the United States, which is occurring at a fast pace and has good prospects so far, and to the situation in Rio Grande do Sul. The state has not yet finished harvesting the soybean crop and could experience a failure with the incessant rains. Furthermore, the sector continues to keep an eye on the Brazilian harvest, which could suffer from the lack of rain in the center west and be harmed at the end of the cycle.
The IPCF is released monthly by Mosaic Fertilizers and consists of the relationship between fertilizer and agricultural commodity price indicators. The methodology consists of a comparison in relation to the 2017 base, indicating that the lower the ratio, the more favorable the index and the better the exchange ratio. The IPCF calculation takes into account the main Brazilian crops: soybeans, corn, sugar, ethanol and cotton.
*The source for calculating fertilizer prices in the Brazilian port is CRU, an international consultancy company. Commodity prices are calculated based on the Brazilian market average, in dollars, calculated based on publications made by Agência Estado and Cepea.
**The fertilizer price index includes the values of MAP, SSP, Urea and KCL weighted by the respective shares of their use in the country. Commodities include soybeans, corn, sugar, ethanol and cotton, weighted by fertilizer consumption.
***The index is also weighted by the exchange rate, considering 70% of fertilizers (cost) and 85% of commodities (revenue).
****Crops analyzed: soybeans, corn, sugar, ethanol (sugar cane) and cotton.
*****Data referring to April/2024.
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