Brazil soybean sales slump over 30% amid fertilizer crisis

Soybean sales from Brazil for marketing year 2021-22 (January-December 2022) fell by 30.4% on the year to 68.81 million mt as of April 1, according a survey released April 8 by Datagro, a Brazilian agricultural consultancy.

The raw bean sales from leading global producers slumped against the record-high sales of 98.87 million mt in 2021. The advance sales for the MY 2022-23 also stood 6.9% lower than the last five-year trend of 8.4%. Comparatively, advanced sale estimates were 12.8% on April 1, 2021. High prices of fertilizer were said to be one of the major reasons behind the advance sales slump, according to sources.

The growing fertilizer availability crisis, coupled with rising prices of farm input, could impede soybean output and sales from Brazil going forward, sources said, as farmers have been reluctant to commit to the crop. Brazil depends heavily on fertilizer imports for its domestic needs, as it purchases over 85% of its fertilizer demand.

Datagro's survey showed that the soybean harvest in Brazil reached 82.5% of the sown area as of April 1, growing only 3.3% compared to the previous week. This delayed and slower harvest has been deemed a major reason behind slow sales for the MY 2021-22.

Brazil's national agricultural agency Conab previously slashed output forecasts for the MY 2021-22 were cut again April to 122.4 million mt, down from 122.7 million mt in previous estimates. The new estimates were 16 million mt lower on the year amid extremely dry conditions.

The forecast cut came amid a severe La Niña-induced drought since November in the southern states of Paraná, Rio Grande do Sul, and neighboring regions, which was likely to further stoke supply concerns. The reduced output expectation of Brazilian soybeans in MY 2021-22 could support prices.

Although the MY 2021-22 soybean acreage has increased 4% year on year at 40.8 million hectares, the projected acreage output remains down 12% year on year on a lower productivity of 3,000 kg/ha, which has fallen 15% on the year, the report said.