All posts by mickeybarb@charter.net

Major Brazil Soybean Grower to Cut Fertilizer Use Amid Shortage

One of Brazil’s largest farmers is planning to reduce fertilizer use by a quarter next season, relying on more precise applications and soil testing to maintain crop yields, according to a Bloomberg report.

SLC Agricola SA, which cultivates an area bigger than Delaware with soybeans, corn, and cotton, will probably use between 20-25 percent less fertilizer in 2022-2023 without jeopardizing yields, according to CEO Aurelio Pavinato. The decision on whether and where to cut applications will be based on soil testing and precision agriculture, tools already adopted by the firm for several years.

SLC’s plan offers a glimpse of how growers in the agriculture superpower are preparing to deal with a global shortage of crop nutrients in the wake of Russia’s invasion of Ukraine, which has caused prices to skyrocket, threatening to reduce production of staple crops exported around the world. The prospect of lower yields has increased concerns that crop prices will hit fresh records, adding to pressure on food supply to developing countries.

“It’s possible to cut fertilizers in a year and have a null impact on production,” Pavinato said in an interview. Fertilizer reserves in the soil from previous seasons will ease the impact of applying less, he said.

The majority of farmers will probably adopt the same strategy, and lower demand will lead the market to balance again, he said. Of the three key nutrients for crops, SLC has secured 83 percent of the potassium it is planning to apply next season and half of the phosphorus, but has not yet bought nitrogen.

In the Cerrado, where the main grain belt is located, a lack of nutrients in soil makes farmers more dependent on fertilizer, according to Flavio Bonini, a manager of technical services for The Mosaic Co. in Brazil.

Only about 15 percent of Brazil’s agriculture areas may sustain itself without fertilizers, Bonini said. The estimate is based on figures collected from farms where Mosaic does soil testing for its clients. “About 80 percent of Brazil’s agriculture areas are still very reliant on fertilizers.”

On the farms owned by Sementes Falcao, a farming and seed company based in Passo Fundo, Rio Grande do Sul state, one of the areas with the richest soil in Brazil, tests on cutting fertilizer were successful. The company spent five seasons using only nutrient reserves in the soil, according to its President, Humberto Falcao.

“Production may have declined a little, but the profitability was kept,” he said. “Brazil could spend a year with no fertilizers, which could reduce costs and its dependency on imports. But of course it needs soil analysis.”

Topsoe Exits Russia and Belarus

Technology provider Topsoe, Lyngby, Denmark, announced that it is closing down its operations in Russia and Belarus, including its office in Moscow. The closings follow Topsoe’s earlier decision to make a full stop for all new business activity in Russia and Belarus.

“We are horrified about the Russian invasion of Ukraine, that leaves the Ukrainian people to suffer. Immediately after the invasion, we chose to go even further than the imposed sanctions and put a full stop for all new business activity in Russia and Belarus, as we did not want to support this illicit and brutal aggression from Russian side,” said Roeland Baan, Topsoe CEO.

Topsoe is currently in the process of settling all formal obligations in Russia and Belarus, including voluntary liquidation, and expects to have exited the countries within a few months. This also includes closing down Topsoe’s office in Moscow, which currently employs around 80 people.

“My deepest concern related to our exit is our talented colleagues in Moscow, who have been part of the company for years. We all deeply care for our affected colleagues, and fortunately we have found appropriate jobs for some of them in other parts of our global oriented organization,” Baan said.

Brazil Gets Less Fertilizer Even as Bolsonaro Touts Russia Ships

The world’s biggest soybean crop in Brazil is under threat with new data showing vital shipments of Russian fertilizer are slowing down, according to a Bloomberg report.

The number of new cargoes leaving Russia is dropping even as Brazilian President Jair Bolsonaro touted on April 26 that over two dozen ships are en route. Sanctions and logistical disruptions due to the Ukraine war are causing the slowdown.

The shipments are critical, because Brazilian soybeans go into everything from cooking oil to animal feed all around the world, and a shortfall of fertilizer could result in smaller supplies. Time is running out to get the right amounts needed for planting the South American nation’s mammoth crop in September. Rising soy prices could reverberate throughout world food supply chains and exacerbate inflation.

Brazil is so desperate for fertilizer that it is a key factor in Bolsonaro’s agnostic stance toward Vladimir Putin’s war against Ukraine.

“We’ve adopted a balanced position on this conflict because we can’t survive without fertilizer,” Bolsonaro said April 26 at an event in Brasilia.

Even with Bolsonaro’s armada on the way, data compiled by Bloomberg’s Green Markets shows plunging shipments. Line-up figures on Brazil’s ports schedule show new volumes of Russian fertilizer down 58 percent in the past four weeks compared with the prior period.

Both Russia and Belarus, which account for almost a third of Brazil’s fertilizer imports, are under sanctions from Western nations. No shipments from Belarus have been added to line-up schedules since late February, while new volumes from Russia are falling, according to Marina Cavalcante, an analyst at Bloomberg’s Green Markets.

The declines “may represent a risk for fertilizer supplies in the second half of the year,” said Cavalcante.

Brazil imports more than 85 percent of the fertilizer that it consumes.

Incitec Pivot Completes Acquisition of French Explosives Manufacturer Titanobel

Incitec Pivot Limited (IPL), Southbank, Victoria, has completed the acquisition of the Titanobel Group, a leading industrial explosives manufacturer and drilling, blasting, and technical services provider based in France, the Australian company said on April 29.

The completion follows an agreement IPL entered in January to acquire 100 percent of the shares in Explinvest, a holding company of the Titanobel Group, for €91 million (approximately A$134.7 million and US$95.7 million at current exchange rates) (GM Jan. 14, p. 30).

“Together, we will be able to build on the strengths and expertise of both businesses which have a great synergy,” said IPL Managing Director and CEO Jeanne Johns. “The acquisition is an important milestone in the execution of our strategy to extend our brand and world leading technologies into the Europe, Middle East, and Africa (EMEA) region “

The EMEA market is significant in size and characterized by low ammonium nitrate requirements, stable or growing mineral markets, and large initiating systems usage with low penetration of electronic detonators, Johns said.

IPL said in January the transaction would be funded from IPL’s own existing cash and debt reserves.

Western Potash Receives C$85 M Loan

Western Potash Corp., Vancouver, on April 29 announced that it has entered into a C$85 million term loan facility financing transaction with Appian Capital Advisory LLP, London. The company said the loan has been negotiated at arm’s length and will not materially affect control of the company.

It said proceeds will enable Western to continue and complete the remaining construction and development of the Milestone Phase I Project in Saskatchewan, pay out existing creditors, and for general and administrative expenses of the project.

“I am proud of the breakthrough that the Western team has made in signing the loan transaction with Appian,” said Bill Xue, Chairman and CEO of Western Resources Corp. “This funding, together with the C$80 million equity investment (GM Feb. 18, p. 33), will provide a huge capital injection for Western and a solid foundation for the completion of the project. I am grateful to the dedicated team members for their hard work and look forward to witnessing the revolutionary changes the project will bring to potash mining in the Province of Saskatchewan.”

Ammonium Thiosulfate

Eastern Cornbelt:

The ammonium thiosulfate market was reported at $675-$720/st FOB in the Eastern Cornbelt, depending on location, with the low confirmed at Ottawa. Cincinnati pricing was reported at the $700/st FOB level.

Western Cornbelt:

Ammonium thiosulfate pricing remained at $685-$725/st FOB in the Western Cornbelt, with the high reported in the Iowa market on a spot basis.

Southern Plains:

Ammonium thiosulfate prices remained at $550-$600/st FOB in the region, depending on location, with the Houston market reported at $550-$575/st FOB.

South Central:

The ammonium thiosulfate market was pegged at $600-$610/st FOB Memphis, up another $25-$30/st from last report.