Brazilian fertilizer production and paper from the railroads

O agribusiness is one of the main pillars of the Brazilian economy. In 2021 alone, this sector was responsible for about 28% of national production. Among the main products distributed are soybeans, corn, coffee, beans and beef. One of the factors that allows the high productivity and quality of these products is the use of agricultural inputs, such as fertilizers. Despite the growing demand, the current production of fertilizers in Brazil is not enough to meet the needs of the country's agribusiness.

Therefore, most of these inputs must be imported from other countries, such as Russia, Canada and China, for example. To better understand Brazilian fertilizer production, how it affects agribusiness and the role of railroads in this process, we prepared this article. Check out: 

Brazilian fertilizer production

Fertilizer can be defined as any mineral or organic substance, natural or synthetic, that is capable of providing plant nutrients. Among the most important nutrients for healthy plant development are nitrogen, phosphorus, potassium, calcium, magnesium, etc.

The proper use of these products can considerably influence the cultivation of various plants, even in situations where the soil in question is not ideal. It is possible to perceive this transformation in the Cerrado, which, naturally, has a soil that is very poor in nutrients, and, even so, has become one of the largest soybean production sites in the country.

Despite being small, Brazilian fertilizer production exists. The fertilizer most produced in Brazil is the one made from phosphorus: about 45% of the consumption of phosphate fertilizers in the country was of national origin. Nitrogen fertilizer is also produced in the country, totaling 26% of national consumption. The production of potassium inputs is much smaller: making up only 6%.

That said, Brazilian fertilizer production is mainly directed to the regions with the greatest agribusiness operations in the country, such as Mato Grosso, o Rio Grande do Sul and Paraná, for example.

International demand

Brazil, being an agricultural power, needs a large volume of fertilizers and other agricultural inputs to maintain and improve its productivity. Since Brazilian fertilizer production is not able to supply the growing demand, the path chosen was import. 

According to a study carried out by the Special Secretariat for Strategic Affairs, more than 80% of the fertilizers consumed in the country are imported. In the case of nitrogen, phosphate and potassium fertilizers, for example, the countries that most exported to Brazil were Russia, Canada and China.

The reason that explains the leadership of these countries in the sale of fertilizers is their large mineral reserves. Russian territory, for example, has many reserves of natural gas, which can be used to obtain nitrogen. On the other hand, Canada has the largest potash reserves in the world.

That said, of the 41.58 million tons of fertilizers imported in 2021, 8 million went to Mato Grosso, making it the largest consumer in the country. This happens because the economy of the state of Mato Grosso depends a lot on its agricultural production, after all, it is the main exporter of soybeans and corn in Brazil.

Rio Grande do Sul is not far behind: in total, 6.6 million tons of fertilizers were imported. In this case, the main destination of the inputs is the production of the soy complex, which includes soy beans, oil and bran. In 2021, exports from the state of Rio Grande do Sul registered considerable growth, yielding US$ 15.3 billion, about 52% more than the numbers of the previous year.

Paraná was responsible for importing 5.4 million tons in the year. This can be explained by the 17% increase in exports of agricultural products in the state, compared to the previous year. Among the main items traded by the state are soy beans, chicken meat and sugar.

Role of the railroads in this context

Because Brazil has a very extensive territory, the existence of a transport infrastructure is an indispensable factor. Considering that most of the fertilizers used in Brazilian agribusiness are of international origin, it is very important that the Brazilian rail network be developed in such a way that it connects the country's producing areas to the port areas.

Currently, the main ports of entry for fertilizers in the country are the ports of Paranaguá (PR), Rio Grande (RS) and Santos (SP). In 2018, they were responsible for 64% of product imports, which totals more than 16 million tons. 

After entering Brazilian territory, fertilizers and manures must be transported to the regions with the highest agricultural production in the country. Despite road transport being the most used modal in Brazil, recent investments in new railwroads suggest an imminent change in this scenario and can greatly optimize the flow of products and fertilizers. 

For example, in early 2022, the construction of a new railroad section in the state of Mato Grosso was approved. Connecting the municipalities of Água Boa and Lucas do Rio Verde, the new 557 km extension promises to considerably speed up the logistical processes of fertilizer distribution, positively affecting the production of soy, corn and local characteristics.

Another recent project that has greatly contributed to the distribution of fertilizers is the new loading structure implemented by the logistics company VLI. This new system allows the raw materials unloaded at the Port of Santos to be transported entirely by rail to the terminal in Uberaba (MG). This measure will benefit the cultivation of products characteristic of the Triângulo Mineiro, such as sugar cane, coffee, soybeans and oranges.

Conclusion: fertilizer production

It was possible to perceive that agricultural inputs play a very important role in Brazilian agribusiness, which is in increasing expansion. However, Brazilian fertilizer production cannot keep up with the growth of the agricultural sector, so investments in transport infrastructure are increasingly necessary, such as the construction and modernization of railroads in the country.

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