Content ID

331915

Brazil fertilizer import bonanza exposes logistical gaps

By Marcela Ayres

BRASILIA, Aug 8 (Reuters) - Brazil's plan to boost internal fertilizer supplies cannot succeed without infrastructure investments, a government official told Reuters on Monday after a strong importing season exposed domestic logistical woes.

Brazil announced its plan in April to reduce reliance on imports after Russia's invasion of Ukraine in February.

But after buying record volumes of fertilizer in the first seven months of the year, the state of certain Brazilian ports was almost a revelation to the government.

"We discovered that the problem was not in shipping schedules, nor was it related to port services or the customs authority," said Luis Eduardo Rangel, the agriculture ministry's programs director.

He said the problem is a lack of warehouses around the ports, which are typically owned by the private sector to store and distribute products.

There can be no plan to boost internal supplies without improving that type of infrastructure, he noted.

Rangel said Brazil's "fertilizer diplomacy," which involved high-level talks with countries like Russia and Iran in recent months, helped secure fertilizer imports for the country's summer crops, though at higher prices.

At least one company said logistical bottlenecks are hampering domestic fertilizer deliveries, a sign that while fertilizer imports surged, farmers are worried about rising costs, which in itself also exacerbates logistical problems.

Anda, an association representing local fertilizer distributors, estimated $2 billion in demurrage rates, a charge applied to containers left at the port for longer than expected, this year, according to Rangel.

That bill would have to be fronted by local farmers, he said.

Anda did not have an immediate comment.

Around 85% of the fertilizers used in Brazil come from imports, and the government aims to reduce that to about 45% by 2050.

"So now we need warehouses," Rangel said. "By 2050, when the plan is concluded, I am still going to import 50 million tonnes of fertilizers even if I produce 50 million tonnes." (Reporting by Marcela Ayres; Writing by Ana Mano; Editing by Josie Kao)

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