Third International Conference on Slow- and Controlled- Release and Stabilized Fertilizers Fertilizers in Brazil New opportunities Rio de Janeiro March, 213 Index 1. Brazilian Agriculture Fertilizer Market; 2. Profitability & Trade Crops 3. Seasonality 4. Fertilizer Demand Forecast 5. Concluding Remarks Source: Cepea, IBGE 1
Brazilian Agriculture Fertilizer Market Over the past 7 years, fertilizer demand in Brazil has increased at an average rate of 5.6% annually. The growth trend was interrupted in 28 as a consequence of the financial crisis and due to the huge increase in the price of fertilizers. Only in 21 the market was able to recover to the 27 s levels and since then it has been reaching new consumption records in 211 and 212. Fertilizer Demand 25 212 (million t) Nutrient Demand by Crop 212 (Share %) CAGR P: 5.6% CAGR N: 5.5% 2.2 21.7 24.6 22.4 22.5 24.5 28.5 29.5 8.6 9.3 1.6 9.4 9.2 1.2 11.8 12.6 25 26 27 28 29 21 211 212 Nutrient Products Source: Cepea, IBGE Soybean Profitability (R$/ha) The recent outcome is a consequence of the good financial results farmers have obtained over agriculture expenditures during the past crops. Soybean Profitability Mato Grosso (R$/ha) Yields 6 kg bgs / ha ANDA, ABRASEM, ANDEF 2
Soybean Terms of Trade The increase in the commodities price, which was greater than the growth in input prices, improved the relative price of fertilizer, fostering demand. Soybean Terms of Trade Mato Grosso (bags 6 kg / ton of fertilizer) bags 6 kg / ton of Fertilizer Soybean - Mato Grosso 6 5 4 3 32,6 2 23,8 1 jan-5 jan-6 jan-7 jan-8 jan-9 jan-1 jan-11 jan-12 jan-13 Terms of Trade Average ANDA, ABRASEM, ANDEF Corn Profitability (R$/ha) Corn Profitability Paraná (R$/ha) Yields 6 kg bgs / ha 121 115 15 159 145 173 177 175 196 184 187 19 2.376 2.621 1.45 1.89 1.429 1.353 1.628 82 762 245 126-34 3
Corn Terms of Trade Corn Terms of Trade Paraná (bags 6 kg / ton of fertilizer) bags 6 kg / ton of Fertilizer Corn - Paraná 14 12 1 8 6 65,2 4 53,8 2 jan-5 jan-6 jan-7 jan-8 jan-9 jan-1 jan-11 jan-12 jan-13 Terms of Trade Average Cotton Profitability (R$/ha) Cotton Profitability Bahia (R$/ha) Yields @ / ha 223 26 265 22 26 265 198 255 256 258 259 26 Pepro Margin 716 193 524 1.722 1.617 325 495 1.123 1.397 528 686-159 2.69 3.379 1.58 2.439 2.126 2.585 3.93 3.117 4
Cotton Terms of Trade Cotton Terms of Trade Bahia (bags 6 kg / ton of fertilizer) 6 Cotton - Bahia @ / ton of Fertilizer 5 4 3 2 1 25,6 19,2 jan-5 jan-6 jan-7 jan-8 jan-9 jan-1 jan-11 jan-12 jan-13 Terms of Trade Average Sugarcane Profitability (R$/ha) Sugarcane Profitability São Paulo (R$/ha) Yields tons / ha 72 75 77 84 86 81 69 73 77 81 83 84 85 172 1157 1275 845 923 647 583 677 347 377-132 -395 5
Sugarcane Terms of Trade Sugarcane Terms of Trade São Paulo (bags 6 kg / ton of fertilizer) ton of Sugarcane / ton of Fertilizer Sugarcane - São Paulo 6 5 4 3 26,7 2 19,5 1 jan-5 jan-6 jan-7 jan-8 jan-9 jan-1 jan-11 jan-12 jan-13 Terms of Trade Average Coffee Profitability (R$/ha) Coffee Profitability Minas Gerais (R$/ha) 5.353 4.79 5.61 5.885 3.619 88 1.6 875 43-15 -46-1.292 6
Coffee Terms of Trade Coffee Terms of Trade Minas Gerais (bags 6 kg / ton of fertilizer) bag 6 kg / ton of Fertilizer Coffee - Minas Gerais 8 7 6 5 4 3 3,2 2 2,7 1 jan-5 jan-6 jan-7 jan-8 jan-9 jan-1 jan-11 jan-12 jan-13 Terms of Trade Average Fertilizer Demand - Seasonality Freight Prices (R$/t) Seasonality of Fertilizer Delivery - million t 25 2 15 Rondonópolis (MT) -- Santos 21 211 212 1 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 3 25 2 15 1 5 Sorriso (MT) -- Paranaguá 21 211 212 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec AEDATA, Sifreca 7
Farmers demand Market Drivers Efficiency improvement Decreasing NPK dose / ha; Nutrient availability 2/3 months before planting time; Cost guided by terms of trade; Yields average similar to conventional sources (at least); Decreasing environmental potential damages;. High technology corn PR 212/13 season Expected yields 176 bags/ha S.R. urea premium price 15% above regular urea. Corn Cost of production Urea Regular vs slow release Preharvesting machinery and Regular Urea SR Urea % Seeds, chemicals, fertilizers, others R$ 1,554. R$ 1,535.74-1.2% N (kg) / ha 1 1.% Urea efficiency 8% 1% 25.% Kg/ha 272 217-2.% R$/kg R$ 228.26 R$ 21. -8.% Total Cost / bag R$ 18.4 R$ 14.6-19.1%. 8
Fertilizer Demand Forecast In this context, fertilizer market has expanded, reaching 29.5 million tons of product and 12.6 million tons of nutrient in 212, the best result so far. The perspective is that fertilizer demand will continue to grow in the coming years at a CAGR of 3.4% (for products) and of 3,% for total nutrients. Fertilizer Demand 212 217 (million t) Nutrient Demand 212 217 (million t of nutrient) 29.5 3.4 31.5 32.6 33.7 34.8 3.4 4.1 4.3 5.3 5.3 4.8 12.6 12.7 13.2 13.7 14.1 14.6 212 213 214 215 216 217 N P K Nutrient Products 212 217 ANDA. Fertilizer Demand Nitrogen Forecast Nitrogen demand in Brazil has increased significantly since 25 not only due to greater usage (kg/ha) for all the crops but also because of the consolidation of the sugarcane industry and the corn winter crop. The market will grow 3.6 annually till 217, achieving the level of 3.7 million tons. Urea is the main N source demanded in the country, accounting for 51% of this nutrient. Supply composition by product in the future must stay at the current levels. Nitrogen Demand (million t of nutrient) Nitrogen supply by Product 25 2,4 + 5.3% 21 3,4 212 3,4 + 3.6% 217 4,1 ANDA. 9
N-Raw Material Demand Forecast The demand for all N-based products will increase in the next 5 years but Urea will grow at a lower rate than other products, which has a lower content of nitrogen Demand by Product 25-217 (million t) 4,5 2,7 2,5 1,6,9 3,5 2,8 2,1 1,3 3,7 3,5 2, 1,8 4,1 2,4 2,1 CAGR 25-217: Total Urea: 4,2% SR Urea 8,4% Regular Urea 3,3% 25 26 27 28 29 21 211 212 213 214 215 216 217 Urea SAM NAM MAP/DAP. Concluding Remarks Opportunities Market features and results are improving There is a search for the increase of productivity Agricultural producers are now managing their resources in a better way Farmers are capitalized and the scenario is positive for the coming years Great environment regarding the receptivity to new technologies. 1
Thank You! Cleber Vieira clebervieira@agroconsult.com.br Agroconsult Consultoria & Projetos ++55 (11) 98467-94 11