Credit problems in Brazilian fertilizer market challenge positive outlook

Credit challenges in the fertilizer sector in Brazil could curb growth in the coming years, market participants said at the 12th Brazilian Fertilizer Congress Sept. 2.

"Our farmers need accessible, predictable lines of credit," Eduardo Monteiro, chairman of the board of ANDA, the organizer of the São Paulo event, said during the opening ceremony.

He said that in the last two months, "the Brazilian fertilizer market has faced strong impacts," with the first issue being the pace of credit releases to farmers and the second the process of formalizing credit guarantees.

He added that planning was crucial "to have peace of mind to produce at scale."

Optimistic projections

In the most optimistic scenario for fertilizer demand in Brazil, consumption for 2025-2036 is expected to increase from around 48 million mt/year to 58.5 mt/year in 2030, and up to 73.1 mt/year in 2036, according to José Carlos Polidoro, adviser to Brazil's Ministry of Agriculture and Livestock.

Polidoro highlighted an expected expansion of the fertilizers market to $240 billion by 2030, with $82 billion in green and technological solutions.

However, challenges remain ahead for Brazil, such as regulation to drive the sector and credit issues, two of the main issues highlighted at the event.

"Despite problems with credits for farmers, fertilizer consumption has increased; the credit problem is related to the high rate, but it is not impacting the strong demand we are experiencing," he told Platts, part of S&P Global Energy.

He pointed to a credit problem for the smaller farmers and highlighted the public Pronaf initiative for cheaper credits, with 6% rates.

Government's plans

A government environmental recovery program called Green Path (Caminho Verde) provides an opportunity for the fertilizers sector, according to the government. The initiative aims to restore 40 million hectares of degraded lands suitable for crops and consequently increase fertilizer use in those areas.

The opportunity for growth also comes from 60% of the small farmers who have never used fertilizers.

Regarding sustainability, fertilizers account for 20% of Brazil's agricultural greenhouse gas emissions. This presents an opportunity for low-carbon innovation, Polidoro said.

Polidoro said the program's expected impact is to consolidate Brazil as the second- or third-largest global consumer, moving it from fourth place.

However, he said, "If fertilizer demand grows as we expect in the coming years and there´s no investment, Brazil might have a very serious logistics problem."

The Green Path program will work in parallel with the National Fertilizers Plan, an initiative to increase local fertilizer production while reducing reliance on imports, currently around 85%.

Despite the government´s efforts, fertilizer production has not increased as expected. Growth to cover higher demand came largely from imports. Between January and July 2025, imports reached 24.2 million mt, representing an 8.86% increase year over year, according to government statistics.

"This is the result of 30 years without a public policy for the sector, which we are still suffering," Polidoro said. "Yet, we got EuroChem to reopen a plant, we got Petrobras again in the business, with three facilities to be reactivated for fertilizer production."