CNA and experts debate the impacts of rising input prices in agriculture

The rise in input prices and the impacts of this scenario on the agricultural sector were discussed in a live broadcast promoted by the Brazilian Confederation of Agriculture and Livestock (CNA), on Tuesday (26/07).

The meeting was moderated by CNA's technical advisor, Thiago Rodrigues, and with the participation of agronomist and founder of Veeries, Fábio Meneghin, and the sectoral analyst of Agricultural Inputs from Rabobank Brasil, Bruno Fonseca.

“The objective was to show the behavior of inputs in recent months and how they have influenced the producer’s daily life. In addition, bring a sectoral view on the main points that have worried the sector, such as the increase in fertilizer and diesel prices and disbursements for pesticides”, said Thiago.

In the live, agronomist Fábio Meneghin stated that fertilizer is the great villain of production costs for the next crop. “Fertilizer prices were already high since last year. With the war in Ukraine, raw materials, mainly phosphorus and potassium, skyrocketed”.

According to Meneghin, historically, Brazilian rural producers buy inputs in the first half of the year, as it is a better business option. However, those who underwent this operation ended up paying more. "The producer preferred to guarantee the fertilizer, than run the risk of running out of the product".

Fábio warned that in addition to fertilizers, sea freight also increased. At the start of the war, in mid-February, freight rates via China-Brazil jumped from US$50,00 per ton to US$70/ton.

In his speech, analyst Bruno Fonseca highlighted that despite the high prices of fertilizers, Brazil is not at risk of running out of the product. “Even with the war in Ukraine, we imported 19,2 million tons of fertilizers in the first half, a 20% increase compared to the same period last year”. 

For Bruno, carry-over stocks are higher than in the 2021/2022 harvest, which guarantees a supply of products for the beginning of the harvest in September. “With the possibility of a lack of inputs at the beginning of the war, many producers began to plan better to buy and use the products”, he said.

With regard to diesel prices in the domestic market, the founder of Veeries explained that in Brazil prices are more expensive than in the international market, but reducing values ​​can impact the availability of fuel in the country. “At that moment, the drop in diesel could stimulate consumption and we would have a tight balance between supply and demand, but I believe there is a possibility of reducing prices at the refinery”.

The Agricultural Inputs sector analyst at Rabobank Brasil stated that diesel impacts production costs on the property and, mainly, freight, but that the pricing policy is what guarantees supply in the domestic market.