Sao Paulo-(ChemAnalyst) The fertilizer industry in Brazil is enjoying a solid run due to strong demand and surging costs of crop nutrients. Bullish agricultural market trends, a rally in crop commodity prices, and attractive farm economics drive demand for fertilizers. The war between Russia and Ukraine has caused a tight global supply-demand balance, boosting the fertilizer stocks, prices, and profit margins. This incitement is expected to remain, backed by strong demand and pricing fundamentals for crop nutrients.

Brazil imports over 18.2% of Potassium Chloride, majorly from Canada, Russia, and Belarus, restricting their exports to protect their farmers. This is compounded by heavy consumer demand from Brazil, which is buying in large quantities, reducing available global supplies, even as raw material and energy costs also increased.

Growing economics remains attractive in most global regions on strong crop demand in major markets like Brazil. Despite concerns that sanctions would limit Russian fertilizer shipments to Brazil, shipping data shows fertilizer is still being shipped, Reuters reported. At least 24 vessels carrying almost 678,000 MT of Russian fertilizers will reach Brazil in the following weeks. Brazil gets about 19% of its nitrogen fertilizers from Russia, according to the data compiled by International Food Policy Research Institute (IFPRI). Most are carrying Potassium Chloride used for soybean and corn production, and the war in Ukraine is hitting the supply of potassium fertilizers especially hard.

Brazil’s agriculture minister recently met with officials from the Canadian government and executives from potash companies to try to secure supplies for her country. While potash prices remain elevated, the current crop prices continue to drive steady demand in the US, and US potash prices are still at a record differential to Brazil.

As per Chem Analyst, the Potassium Chloride market is expected to surge during the coming months in Brazil, and product unavailability will increase the market sentiments. The low availability of inventories with the Brazilian traders amid high demand from the downstream markets could further exacerbate the Potassium Chloride prices in Brazil. As per the reliable market source, an alarming shortage of raw materials has already stopped domestic manufacturers’ output, which will also take time to resolve.