Logistics for moving fertilizers in Brazil

Brazil is a country of continental proportions, occupying an area of 8,514,876 square kilometres in South America. Agribusiness is one of the most important segments of the economy, responsible for large volumes of exports, representing more than 25% of the Brazilian Gross Domestic Product. In the last 40 years, grain production has grown over sixfold, while the planted area has only doubled, this being the result of the use of technology and fertilizers in plantations. The largest Brazilian agricultural crop is soybean, which requires more than 40% of the fertilizers handled in Brazil. Want to know more about how the logistics works for the handling of fertilizers? Keep reading:

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Fourth largest fertilizer consumer in the world

As of April, imports of fertilizer into Brazil begin to increase with the completion of the soybean harvest and follows the rhythm of exports of this oilseed, corn and cotton. This type of cargo uses the return freight modality, aiming to reduce the logistical cost, that is, it moves towards the ports with the grain and returns to the producing regions with the fertilizers.

Brazil occupies the fourth place in the global ranking of fertilizer consumers, being responsible for the acquisition of 8% of the world production. About 80% of the fertilizers used in Brazil are of foreign origin and arrive by sea, coming from producing countries, such as Russia, Canada, Belarus, China, Israel, Morocco, Algeria, Egypt, Germany and the United States.

According to the Logistic Bulletin of the National Supply Company (Conab), a public company linked to the Ministry of Agriculture, Livestock and Supply of Brazil, the import of fertilizers in 2021 was a record, reaching the historic mark of 41.6 million tons. The volume exceeds on average 18% of the total delivered in 2020, which, in turn, had already increased by 13.2% compared to the previous year.

Optimistic forecasts for 2022

Despite the strong increase in the average price of fertilizer due to the increase in fuel prices around the world, in addition to the uncertainties about the supply from important players, such as China and Russia, the forecast is that 2022 will repeat the large volumes registered last year. Today, at Wilson Sons – the largest integrated operator of port and maritime logistics in the Brazilian market, active for more than 180 years – the segment is the third busiest commodity.

The main fertilizer receiving terminals in Brazil are in the South region, in the states of Rio Grande do Sul and Paraná; in the Southeast, in the state of São Paulo; and in the North and Northeast of the country, on the axis called Arco Norte, an important logistical corridor for agricultural commodities for the international market.

The ports of Paranaguá, São Francisco do Sul and Rio Grande, in the South region, Santos, in São Paulo (Southeast), and Itaqui, in Maranhão (Arco Norte) were responsible for 88% of the total volume of fertilizer imports. The Port of Santos, the largest port complex in Latin America, handled 10.1 million tons in 2021 against and 6.6 million in 2020, up 53%, according to Conab data. The main destination for the cargo is the Midwest region, the largest grain producing area in Brazil.

New routes, lower costs

Data from the Brazilian Ministry of Agriculture show that the main fertilizer importing state is Mato Grosso, in the Brazilian Midwest, which received about 8 million tons of fertilizer in 2021. Most of the cargo, however, arrived through the ports of Santos and Paranaguá, located more than 2,000 kilometres from the region. This distance has generated high freight costs, causing an intense flow of trucks, since the transport of fertilizer between Brazilian states is primarily done by road, according to the land transport regulatory agency of the Federal Government.

As an alternative to reduce the logistical cost of this high value-added product, rural producers in Mato Grosso have been looking for new routes, such as the Arco Norte logistical axis. The volumes of fertilizers received at ports in the region last year represented 29.1% of the volume imported to supply Mato Grosso.

The Arco Norte logistical axis

Arco Norte has great port potential, especially after the conclusion of the BR-163, which connects the South to the North of the country. The area encompasses seven Brazilian ports, one in the Northeast – Itaqui, in the state of Maranhão – and six in the North: Porto Velho, Miritituba, Santarém, Barcarena, Itacoatiara and Manaus. In total, fertilizer loads handled by these terminals increased by more than 30% in 2021. In addition to Mato Grosso, the products also went to the Matopiba region, which includes the states of Maranhão, Tocantins, Piauí and Bahia, in the North and Northeast of Brazil.

With the greater participation of Arco Norte in the export of corn and soybeans, a greater movement of fertilizers is expected in the coming years, with the use of return freight. Among the factors that favour the development of the ports in the region are the great capacity for expansion of the port area and the retro-area of the terminals, a favourable draft to receive larger ships, which are a trend in world navigation, and the proximity to the Panama Canal, which can shorten trips to Asia by around 11 days.

In 2021, the highlight among the ports of Arco Norte in importing fertilizers was Itaqui, due to its loading and unloading infrastructure, cargo handling as well as road and rail access. Itaqui handled 38% of the total received by the seven terminals that form this logistical axis.

The port of Maranhão is in a privileged location and is only 15 days away from Europe. Despite suffering from a long rain period, characteristic of the region, which significantly increases the waiting time of ships at anchor to around 25 days, Itaqui had a growth of 19%, in 2021 in the volume of fertilizers. The terminal has five berths available for handling solid bulk and, in 2022, a new operational berth will be approved.

Solutions for rural producers

An important fertilizer destination in the southern region of Brazil, the Port of Rio Grande in the state of Rio Grande do Sul, the second largest importer of the product in Brazil, behind of only Mato Grosso. The port has been promoting the import of fertilizers via containers, with good results.

Fertilizers are transported in big bags, capable of carrying up to one ton of the product, inside unplugged reefer containers. These containers are then used to export frozen meat and, as most of them would have been returned empty, the solution benefited both the shipowner and the buyer of the product.

Importers have three options for unloading this type of cargo: delivery in big bags, with the cargo being unloaded at the terminal yard and sent to the customer; bulk cargo, in which an adapter installed on the forklifts makes it possible to offload the fertilizer straight into trucks efficiently and quickly; and spawning in bulk, tipping the full container at the customer’s premises.

The solution has been successfully adopted by rural producers in the region, who point to the benefits such as reduced costs, more independence to purchase their products and greater efficiency in cash flow, with the possibility of keeping smaller inventories. In 2021, the Port of Rio Grande recorded a 50% increase in the handling of fertilizers in containers compared to the previous year.

In a scenario in which Brazil has been breaking fertilizer import records, as it expands agricultural production, increasingly efficient logistical solutions are needed for both the export of grain and for the import of inputs. Thus, it is possible to develop the production chain as a whole, increasing national competitiveness.

How about knowing a little more about how fertilizer is imported into Brazil? Keep an eye on our blog!