From Fertilizar Asociación Civil they are already thinking about the final campaign 2022/2023, which will have wheat as the protagonist and again, according to forecasts, there would be rains below normal, making the context “challenging”. In this regard, the specialists pointed out that if the producer “has adequate humidity, he intends to continue investing in fertilization technology aiming at achieving yields and quality.”
Analyzing the keys to managing the nutrition of the wheat crop, the president of the entity, Francisco Llambías, recognized that the context changed drastically on February 23, the date on which Russia invaded Ukraine, unleashing a world crisis in the grain market and fertilizers, with soaring prices for both products.
In this regard, he commented on the incidence that these nations have (to which he also added Belarus, a neighbor of both) in the global “trading” of grains, a sector in which they affect 29% of wheat, 17% of corn, 32% of the barley and 76% of the sunflower, which are traded in the world.
In the case of fertilizers, he shared that the world market for this strategic input is 400 million tons and commented that the Black Sea region has an impact both on finished products (nitrogen, phosphate and potash fertilizers) and on supply of raw materials for manufacturing (phosphate rock, sulphur, oil and gas). “In percentages, the participation of these countries in the international trading of fertilizers is 22% in nitrogen; 12% in phosphates and 41% in potassium”, indicated
Francisco Llambías, president Fertilize AC.
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Then, Llambías described the situation in Argentina regarding the supply of fertilizers, given that it depends largely on imports and 70% of the fertilizer consumed (almost 4 million tons) is imported. “Currently, Russia is the fourth supplier of our country, behind Egypt, China and Morocco, with 401,000 tons, which represents approximately between 10 and 12% of the total imported from the country. But the impact does not end there, since other countries that represent important origins for us, are supplied with raw materials originating in the countries of the conflict”, he explained.
In any case, the director expressed that, if there are no complications in the import mechanisms of Argentina for the beginning of the winter cereal campaign, in which urea and phosphorus are mostly demanded, “the forecast of fertilizers for the beginning of the wheat campaign would be sufficient, but the volume of fertilizers necessary for the refertilization of the crop in tillering and in stemming is estimated, and that is still pending.”
In addition, he highlighted that, despite the strong rise in fertilizers since the beginning of the year and the acceleration represented by the armed conflict in this regard, the input-output ratio in recent days changed the downward trend, also due to the rise in grain values (30% more than in 2021). And he also commented that “The input-output ratio is a good indicator, but in this campaign we must analyze the opportunity represented by the substantial improvement in the gross margin of the crop compared to 2021 and 2020.”
In this sense, Fertilizar’s projection is that this year the demand for fertilizers, as long as the limitations on the importation of fertilizers are resolved, may be around 5,200,000 tons, being somewhat less than that of the last cycle with a decrease of 500,000 tons, which represents around 7% less than in 2021, when it reached 5,700,000 tons.
“The international conflict affects the global and Argentine supply of grains and fertilizers, and the current limitations on imports put the supply for the local market at risk. We must focus on attending to this input, since we are facing an opportunity that we should take advantage of,” said Llambías. And he assured: “wheat prices and margins are the highest in recent years.”
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