Brazil's fertilizer market, having recovered to set a fresh
all-time high last year, will expand further in 2017, Fertilizantes Heringer
said, as it unveiled a jump in corn nutrient volumes, but a fallback in sales
to coffee growers.
Fertilizantes Heringer - in which Canada's PotashCorp has a
9.5% stake, and Moroccan phosphate giant OCP a 10% holding – forecast that Brazilian
fertilizer deliveries will rose 3.0% to 35m tonnes this year.
While representing a slower pace of growth than last year -
when deliveries rose by 12.9% to 34.1m tonnes, recovering from a rare decline
in 2015 – it would represent a record high.
And the forecast reflects "the good barter ratios" for
farmers in terms of exchanging crops for fertilizers, amid ideas of increased
Brazilian crop sowings and production.
Conab, the official Brazilian crop bureau, sees domestic
crop sowings for 2017 harvests rising by 1.20m hectares, with production seen
soaring 17.4% to 219.1m tonnes, fuelled by a recovery in corn output from last
year's drought-affected levels.
Corn nutrients in
In fact, data from industry group Anda for January show fertilizer deliveries to Brazilian farmers, at 2.63m tonnes, up 23% year on year, in a rise attributed by observers such as respected analyst Michael Cordonnier as buying, which starts in November, ahead of safrinha corn sowings.
Fertilizantes Heringer flagged a particularly strong
finish to 2016 for its own sales to corn growers, whose purchases soared 27% to 257,000
tonnes in the October-to-December period, reversing losses earlier in the year.
The increase took sales to corn farmers for the quarter
above those to coffee growers, whose purchases sank by 17.7% year on year to 253,000
tonnes, meaning a weak end to what had been a strong year.
The pullback coincided with an easing in arabica coffee
futures in New York over the quarter, although Brazil's own values were
protected somewhat by strength in the real, and continued disappointment at
domestic output of robusta beans.
However, Fertilizantes Heringer's volumes have also come
under pressure from a shift to higher-value specialty nutrients from commodity
products, with the group's overall sales down 6.7% at 1.2m tones.
Sales of specialty nutrients for the October-to-December
period rose by 16.1% to 567,000 tonnes, contrasting with a 21% drop in sales of
"The growth in the sales of Heringer's specialty products in
recent years has been essentially sustained by the significant productivity
gains obtained by its clients with producers' improved profitability increasing
their interest in these products", the company said.
The group reported a 20% tumble to R$1.72bn in revenues for
the quarter, "due to the 4.2% reduction in delivery volume, lower fertilizer
raw material prices and the appreciation of the real".
While the dent was softened somewhat by a boost to margins
from the switch to higher-value products, earnings eased by 2.5% to R$52.4m.