Argentina expects higher fertilizer demand, but it could be hindered by price hikes

Fertilizer demand in Argentina is expected to grow by 7% to 5 million mt in 2025 as imports rise amid increased planted area and favorable weather, according to a report by the Rosario Grain Exchange. However, higher international prices threaten these favorable conditions.

"A 7% growth in demand is expected in 2025," the report stated. This would indicate sustained growth from 2024, when fertilizer use in the South American market grew at a similar pace, reaching 4.9 million mt.

Earlier in the year, the civil association Fertilizar, focused on promoting the rational use of fertilizers in Argentina, had estimated even stronger growth, up to 11%, reaching 5.2 million mt in 2025.

"Given the area planted and to be planted, along with the climatic conditions, it should be a brilliant year for the consumption and application of fertilizers in general; however, increased expected international prices are hindering these favorable conditions," said on Aug. 4 Gustavo Churin, partner at IF Ingenieria en Fertilizantes consultancy firm.

As reflected in the Rosario Grain Exchange report, "the price dynamics of nutrients, which are essential for agricultural margins, can alter the domestic demand for fertilizers."

The second half of the year will be key for 2025 fertilizer sales, as the second semester concentrates more than 60% of fertilizer imports in the country, according to the Rosario Grain Exchange report released on Aug. 1.

On the positive side, "the current climate and soil moisture outlook provides a favorable context for nutrient consumption," the document said.

Moreover, "the recent reduction in export duties improves margins and provides another positive incentive for fertilizers."

But overall, "the exchange ratio between grain and fertilizers is poor," Churin said. Prices have yet to be corrected, following international markets.

For example, urea -- the most widely used fertilizer in Argentina -- was available at $585/mt at the port to distributors, yet below international price levels at the local CFR, a market participant told S&P Global Energy.

Now, the source said, a new tender in India will pressure prices even higher, "and when that is transferred in Argentina, demand is expected to be further impacted," the source added.

More imports

Import data showed a 4.5% year-over-year increase in volume, with 1.34 million mt for the first half of the year, according to the Rosario report. This is "the second-largest volume of fertilizer imports on record," it highlighted.

While it shows a year-on-year decline in volumes of nitrogen fertilizers, that was offset by an increase in imports of phosphate and combined fertilizers, which have more than one nutrient element, combining nitrogen, phosphorus, and potassium.

Platts, part of S&P Global Energy, last assessed CFR Brazil granular urea price on July 31 at $470-$480/mt.