Brazil's 2009 Fertilizer Sales Expected To Remain Steady

Fertilizer deliveries in Brazil should be around 22 million metric tons this year, largely in line with 2008, an industry association official said Tuesday.

About 30% to 35% of deliveries of fertilizer deliveries will take place in the first half of the year, with the rest in the second half of 2009, said Eduardo Daher, director of Brazil's National Association of Fertilizer Distributors, or Anda.

Brazilian farmers are currently swapping their soybeans for fertilizer at the ports, Daher told Dow Jones Newswires.

Brazilian fertilizer deliveries fell 27% from January through May to 6.61 million tons, while deliveries in May reached 1.38 million tons, down 26% compared to a year ago, according to Anda.

Brazilian farmers are currently making planting decisions with a close eye on what is happening with the U.S. soy and corn crops and the weather, he said.

Daher said farmers purchased fertilizer early last year to avoid soaring input prices. This year, however, they are cautiously waiting to see whether fertilizer prices will drop further and commodity prices will rise.

This may lead to a rush of fertilizer deliveries towards the end of the year, he said.

Credit is still the main concern for the sale of inputs such as fertilizer, according to Daher.

Daher hopes that more credit will be available especially to small-scale family farmers in the second half of this year. He said this is likely to happen ahead of the Brazilian elections in 2010.

He also expects that international trading companies such as Bunge Ltd. (BG), Archer Daniels Midland Co. (ADM) and Cargill will make available more credit for farmers this year compared to last year.

Involvement by those companies is especially important in areas such as in Mato Grosso, the No. 1 soy producing state. There, large-scale farmers have racked up large debts and don't qualify for government loans.

Those large farms need fertilizer this year because many of the owners used fewer inputs or no fertilizer for the 2008-2009 crop, said Daher.

Credit should begin to flow from big trading companies in June, July and August, he added.

Brazil is one of the world's largest consumers of fertilizer.

By Tony Danby, Dow Jones Newswires; 55-11-2847-4523; [e-mail]