INTERVIEW: Phosphate fertilizer prices not expected to fall anytime soon: Mosaic Brazil

Brazilian farmers have postponed phosphate fertilizer purchases in hopes of price declines, but without any short-term decrease expected, they risk missing the timing for the upcoming summer planting season, according to Eduardo Monteiro, Mosaic's Brazil country manager, in an interview with Platts.

"There is a delay in sales, as we have commercialized 64% up to this point of all fertilizers we expect to deliver in 2025, while in the same timeframe last year, we had sold 75% of the fertilizers," Monteiro said in the exclusive interview on June 25.

The Mosaic Company, a leading producer of phosphate and potash fertilizers based in the US, considers Brazil a strategic market due to its strong position and favorable outlook. Company officials noted in first-quarter results that sales in Brazil are expected to grow by 15% in 2025. Additionally, Mosaic is preparing to start up its new blending facility in Palmeirante, Tocantins state, in July.

"Farmers have postponed their purchases, expecting phosphorus prices to fall; as they have waited, they are now making decisions at the last minute," Monteiro said.

"However, the window is closing, which means fertilizers may not arrive on time for the summer crops," he added, signaling that a greater concentration can create some logistics bottlenecks.

Possible bottlenecks

Monteiro anticipates that prices will remain firm. "We do not expect a price correction or reduction; on the contrary," he told Platts.

For instance, Platts assessed the price of monoammonium phosphate (MAP) CFR Brazil at $760/mt on June 26, up from $726/mt at the end of May, and a significant rise from $560/mt at the beginning of 2024, according to the assessments.

During the year, challenges have impacted phosphate fertilizer prices, particularly concerning a key raw material. Sulfur prices have remained challenging for fertilizer buyers, with the sulfur affordability ratio holding at a historic high of 21% (sulfur to DAP prices), according to the S&P CI Sulfur Futures report released in June.

More recently, "uncertainties due to the conflict" between Israel and Iran, have added volatility as an additional concern to market players, Monteiro said. A ceasefire has so far held since June 23.

Mosaic's country manager sees "no room for a decrease" in prices as during "moments of uncertainty like this, it further minimizes the possibility of a price reduction." Although Monteiro noted that phosphate prices have not experienced as much volatility as nitrogen fertilizers.

Among factors keeping phosphates prices firm, he said, "the global supply is calibrated, and that China is more restrictive in its exports."

Additionally, "the stock levels in Brazil for high-concentration phosphorus are at the same levels as last year, which were historically low levels, with an expectation of higher demand, as we expect the market to grow by 3% to 4%" year over year, from around a 47 million mt total.

This, in a context where "there is no abundant supply when looking at global prices, as markets like India are paying premiums up to $50 more than the Brazilian market, and that means international producers do not have much appetite to place the product here," he said.

Unlike those expecting prices to fall, Monteiro said, "there is room for an increase."

Nevertheless, the company is closely monitoring producers' profitability to avoid impacting demand negatively.

"The profitability for soybeans is slightly worse than last year, but still positive. And for corn, it is better. When you combine soybeans and corn, the profitability is pretty much the same as last year," he said, noting that levels have reduced from previous exceptional years.

In this scenario, the company notes a substitution of high-concentration fertilizers, like high-priced MAP, for low-concentration types, such as SuperSimple phosphate fertilizers. All in all, Monteiro expects demand to be strong in Brazil despite the timing, with a promising market growth.