Brazil nutrient use rises as coffee growers return

Growth in Brazilian fertilizer consumption accelerated, encouraged by prices which, while declining, are higher than expected at the start of the year, when nutrient use was expected to show a marked slowdown.

Brazilian growers used 2.64m tonnes of fertilizer last month, up 12.4% year on year, industry association Anda said.

The figure took total consumption in the first five months of 2014 to 10.30m tonnes, lifting the rate of growth to 8.0%, well above the pace of increase of 3% that was initially expected for the year.

Indeed, so far in 2014, Brazilian fertilizer use is growing faster than the 5.2% increase recorded for 2013.

Coffee growers return

However, crop prices have, while well below peaks, proved far stronger than expected at the beginning of the year, improving the affordability of nutrients to farmers.

Indeed, Anda noted "increased demand" in nitrogen for crops including coffee, of which prices have staged a particular recovery, boosted by setbacks to Brazilian production from drought besides from nutrient cutbacks last year, when prices hit multi-year lows.

The association also noted increased use for wheat, of which Brazil is reliant on imports - largely from the US in 2013-14 after a poor harvest in Argentina - and of which expectations for this year's harvest are increasing.

Official crop bureau Conab last week raised by 490,000 tonnes to 7.37m tonnes its forecast for this year's domestic wheat harvest a 33% increase year on year.

Stocks eroded

The Anda data also highlighted use on corn, a particularly nutrient hungry crop, with Mato Grosso, a major area for second-crop corn, proving the top state for fertilizer consumption during the January-to-May period at 2.12m tonnes.

Use in Parana, also a major grower of second crop, or safrinha corn, besides of coffee reached 1.37m tonnes, with Sao Paulo, the major sugar cane and orange plantation state, third with 1.29m tonnes.

The data implied a run-down in Brazil's fertilizer inventories, with domestic production falling by 9.2% to 744,557 tonnes last month and imports dropping too, by 12.7% to 1.86m tonnes, with the shortfall in supplies only in a small part made up through a fall in exports.

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