Fertilizer arrivals fall at Brazil’s main port of entry due to lack of space

The volume of fertilizers landed at the Port of Paranaguá, the main port of entry for the product in Brazil, has been falling since February, when the Ukrainian War broke out. According to the port, the problem does not have to do with a shortage of inputs coming from Russia, but with the lack of storage space in private terminals and the rush of importers to guarantee the product.

In February, 1.3 million tons of fertilizers were imported through the port located on the coast of Paraná. In March, this volume dropped to 880 thousand tons. The most recent data, from April, shows that the downward trend continued, with a drop to 609.2 thousand tons.

In addition to the drop in absolute terms, the month of April also stands out as the first month, since November last year, to register a decline in imported volume compared to April of last year – a drop of 31%.

In the six-month period, the highest growth rate was recorded in February, with an increase of 40% over 2021. This increase, however, has already lost pace in March, when landings were only 15% higher than in March 2021.

In the result accumulated in the first four months of the year, there is an 11% growth in landings, with 3.7 million tons unloaded, according to the Port of Paranaguá.

The input is essential for agriculture, and Brazil is highly dependent on foreign suppliers to supply its demand. The possibility of shortages has put pressure on President Jair Bolsonaro (PL), who has agriculture as one of his main electoral bases.

Over the weekend, the president declared that “more than 30 ships with fertilizers are on their way from Russia to Brazil, as a result of the trip” he made in February to Moscow, according to Agência Brasil. “Our agriculture doesn’t stop,” Bolsonaro said.

However, data from Paranaguá, through which about 25% of all fertilizers imported by Brazil pass, show that the problem is not the lack of ships, but the lack of storage space. And for the management of the inflows and outflows of these stocks in the warehouses, which are the responsibility of importers and the fertilizer industry.

“Russia continues to carry [fertilizantes] to Brazil. this fall [em abril] it has to do with storage, and with market conditions. We don’t have space today in the retro area [terminas privados] to receive this load. And there was also a compensation because in a month more was imported, and now to compensate, imports dropped [mensal]”, says Luiz Fernando Garcia, president of the port.

Due to the difficulty of unloading in Paranaguá, a few ships have chosen to continue their journey to the Port of Rio Grande (RS), where there has been no lack of space in the warehouses.

The cost of this operation varies according to the load and the contractual conditions of the import. It may eventually result in savings in relation to the cost of extra nights due to the impossibility of unloading in Paranaguá. The values, however, are not disclosed: they are negotiated between the shipowner and the importer, without interference from the port administration.

Despite the problems, in the last six months, 373 ships loaded with fertilizers entered the Port of Paranaguá. The largest entry movement occurred in February, when 78 vessels were registered. And the lowest number, 50, occurred in April.

“What continues to happen is the anticipation of fertilizer purchases. These figures also stem from that perspective of economic embargoes to Belarus, at the end of last year, and the beginning of the War in Ukraine, remembering that almost a month before the war there was already that announcement of preparation for the invasion, all those images”, says Garcia.

For the president of the port, importers bought volumes above current needs to ensure the delivery of products, which have shown strong appreciation since last year.

“There is a breakdown in the logistics [portuária] because of these anticipations. We have the ability to store [nos terminais privados] of 3.5 million, and everything is full. It is arriving in a greater volume than leaving for the crops”, says Garcia.

For the president of Paranaguá, a smaller portion of the landings in recent days already include orders after the beginning of the war, as he estimates it takes between two and three months between the order and delivery in a Brazilian port.

This Tuesday (3), there were 14 ships in line, supplied with 426 thousand tons of fertilizers, waiting to be unloaded, a movement considered normal by the port administration.

Another 7 vessels are already announced to dock at the Port of Paranaguá, with another 172 thousand tons.

This movement made the port give priority, since the second half of last year, to the landing of fertilizers.

“We revisited our service orders, giving full priority to the unloading of fertilizers. We are a relatively small port, with just over 5 kilometers of public pier, compared to Santos, which has almost 20. Even so, we managed to make almost 60 million tons [de cargas gerais] last year”, says the executive.

At the Port of Santos, the second entry of fertilizers into the country in terms of volume, there was a 28% growth in the volume imported in the first quarter, to 2.3 million tons, according to the port administration, which has not yet released figures for April. .

According to the Port of Santos, the unloading of fertilizers has taken place normally, despite the growth recorded, both at the private terminals and at the pubic pier.