Fertilizers in Brazilian ports point to lower prices

A buildup of fertilizer in Brazil’s main ports is a sign that nutrient prices may need to fall further before farmers start buying.

In Paranaguaprivate warehouses reached their maximum storage capacity of 3.5 million tons, according to Luiz Teixeira da Silvadirector of operations Paranagua.

The terminal operated by VLI Logisticsone of two in the port of Santos that store fertilizers, is also full, according to people with knowledge of the matter who asked not to be identified because the information is not public.

Fertilizer prices soared to record highs after the war in Ukraine sparked fears of shortages. Brazil imports about 85% of its fertilizers and Russia is the main supplier.

As supplies normalize, prices have come down in recent weeks, but farmers are still not buying. They are waiting for more price drops, according to Marina Cavalcanteanalyst of Green Markets from Bloomberg.

“Farmers expect prices to continue to fall after the declines of last week and the previous one,” Cavalcante pointed out. “So they will wait for more casualties to buy.”

Brazil is the world’s largest exporter of several crops, including soybeans. Farmers can delay their purchases until the eve of soybean planting in September. But if everyone waits too long, a last-minute rush could cause inland transportation bottlenecks, leaving some empty-handed.