CRU/Argus Fertilizer Latino Americano 2021

CONFERENCE REPORT

CRU/Argus Fertilizer Latino Americano 2021

More than 250 delegates from 36 countries participated in the 2021 Fertilizer Latino Americano Virtual Conference, 25-28 January 2021. To highlight this successful event, we report on selected keynote and regional presentations.

Mexico City was the venue for FLA in 2019.

PHOTO: BCINSIGHT

Canpotex keynote

“What a difference a year makes,” commented Canpotex’s CEO and president Gord McKenzie in the conference’s opening keynote address.

He was commenting on the transformation of agricultural and fertilizer markets in the year since the start of the Covid-19 pandemic. But, equally, he could also have been talking about the change from in-person to virtual events since delegates last gathered for Fertilizer Latino Americano in Sao Paulo in January 2020.

Latin America’s potash imports totalled more than 10 million tonnes last year. This contributed to making 2020 a good year for potash sales, Gord reported. Canpotex is Latin America’s largest potash supplier. The Covid-19 pandemic, by reinforcing the importance of food security, has delivered at least one partially redeeming upside, McKenzie suggested.

Last year saw strong inventory consumption with an 800,000 tonne drawdown on global potash stock levels. The market was also supported by the strengthening of agricultural commodity prices to multiple year highs. China’s agricultural imports have also reinforced these price levels. Export-oriented agricultural economies, meanwhile, have benefitted from the US dollar’s strength during 2020.

Crop nutrition in Latin America is generally more balanced relative to the global average, Gord noted, due to a wide recognition that potassium is a key nutrient for cash crops such as soybean. Within the region, Brazil is Canpotex’s number one global market and, correspondingly, Canpotex is Brazil’s largest potash supplier. Overall, the country is the leading potash importer globally and the world’s second largest consumer of potash.

Looking ahead, potash market demand fundamentals remain strong, Gord emphasised, with annual growth rates of 2-3 percent anticipated over the medium-term (2020-2025).

Green ammonia opportunities in Chile

CRU’s Josie Armstrong outlined Chile’s potential as a green ammonia marine fuel hub. Although obstacles remain, and current ammonia infrastructure is limited, the opportunity was a very real one, in her view.

Chile is the only country in the region to have published a hydrogen strategy to date. This adopts a three-stage approach: firstly, the local production of green ammonia to substitute for annual imports of 0.3 million tonnes (2023-2028); secondly, a move into green ammonia exports (20282032); thirdly, a focus on the use of green ammonia as a fuel (2032 onwards).

Chile’s great potential for renewable energy is a particular advantage. Access to renewable electricity is essential for powering the front-end water electrolysis units used in green hydrogen generation and, ultimately, ammonia production. Northern Chile has high solar photovoltaic (PV) generation potential, for example, while high and consistent winds speeds in the country’s south are ideal for wind power.

Chile’s general proximity to sea lanes would also be advantageous, if it were to become a marine fuel hub.

Green ammonia is one of several low-carbon candidates (ammonia, hydrogen, methanol) that could fuel and clean-up global shipping in future. The maritime industry accounts for around 2.5 percent of global CO2 emissions currently, with the International Maritime Organisation (IMO) and others pushing for a shift to low-carbon alternatives to traditional fossil fuels. Ammonia has key advantages over its rival green fuel candidate hydrogen. Ammonia’s energy density is higher, for example, and it is also easier to liquefy. Indeed, green ammonia could become a major alternative fuel for shipping by 2050, suggested Josie, although full commercialisation was not expected until after 2030.

She also cautioned that, as a green ammonia hub, Chile faces strong competition from both Trinidad, the region’s largest ammonia exporter with proximity to Mexico and Brazil, and the US, where companies such as CF Industries look set to invest heavily in green ammonia production.

Brazilian market overview

Cleber Viera of Agroconsult emphasised the critical role of five crops – soybean, corn, sugarcane, cotton and coffee – in his excellent summation of the Brazilian market. These collectively account for almost four-fifths of fertilizer consumption in Brazil.

The cultivation of corn, cotton and soybeans is also interconnected, as they are often grown on the same farms in rotation. Soybean, the winter crop, is typically followed by planting of corn or cotton as a second crop in summer. While corn can be planted as a first crop, this practice is in decline with farmers increasingly favouring soybean instead.

Around 17.6 million tonnes of fertilizers – 46 percent of the 38.6 million tonnes in total consumed domestically – were applied to Brazil’s soybean crop in 2020. Dry September-November weather in Brazil last year did delay soybean planting and, as a consequence, the 2020/21 crop production estimate has fallen by 2.3 million tonnes to 131.4 million tonnes, although this remains above the level of the 125.5 million 2019/20 harvest. Record soybean prices (e.g. BRL 170 per bag in Paranagua in November 2020), and correspondingly favourable barter ratios for fertilizers, have boosted the 2020/21 soybean planted area by four percent to 38.4 million hectares. Cleber concluded by giving the same highly positive outlook for both Brazilian soybean and corn in 2021: “High profitability, high confidence, with area expansion.”

Micronutrient fertilization in the Pampas

Current crop nutrient strategies are limiting barley, corn, soybean and wheat yields in the Pampas region, suggests Andres Grasso of Argentina’s Fertilizar Asociacion Civil. This is largely due to the current focus on nitrogen and phosphorus in fertilization recommendations to the exclusion of sulphur and micronutrients such as zinc. Yield gaps in the Pampas of 5-22 percent have opened up because of this. Low soil nutrient levels for sulphur, for example, are a particularly limiting factor in wheat and barley production.

Crop trial results have shown that zinc fertilization of corn in the Pampas is effective at delivering yield improvements. Similarly, applying zinc alongside phosphorous and sulphur has also been shown to improve soybean yields by four percent. Deficiency is, however, on the increase in the Pampas, with 67 percent of soils exhibiting zinc deficiency in 2018, compared to 47 percent in 2011.

However, new crop nutrition strategies, devised following 14 trials on eight sites during four campaigns between 2016/172019/20, are leading to higher yielding fertilizer recommendations for the Pampas. The resulting best practice manual published by Fertilizar in 2020, if followed by Pampas farmers, should help to close current yield gaps, Andres concluded.

Efficacy of biofertilizers and biostimulants in Argentina

Argentina is notably large global marketplace for biostimulant and biofertilizer products, reports Martin Dias Zorita of the Universidad Nacional de La Pampa. Almost 50 percent of Argentinian crops are treated with biofertilizers (inoculants), while some 13 percent of speciality fertilizers sold also incorporate biostimulants.

The evidence base is mixed but largely positive. In biofertilizer crop trials, for example, positive grain yield responses have been comprehensively demonstrated for Argentinian-grown corn, dry peas, soybean and wheat treated with inoculants.

In 2019/20 Argentinian trials, biostimulant (PGA) seed treatments for soybean also improved root nodulation in 80 percent of cases and delivered minor grain yield increases. Other biostimulant products (humic acid), however, while modifying soybean plant growth and development, did not ultimately improve yields. Overall, the positive contribution biofertilizers and biostimulants make to crop production does support their wider adoption, in Martin’s view, although improvements are moderate and can be variable.

Potential DAPR markets in South America

Applying highly soluble phosphate rock offers farmers clear benefits in parts of South America, concludes Martin Torres Duggan of Tecnoagro. In recent evaluations, direct application phosphate rock (DAPR) has proved to be effective for P fertilization of rye grass and soybean, across different soil types and pH ranges. The effectiveness of DAPR does vary, however, with soil properties, crop type, tillage and climate, as well as fertilizer placement and timings.

Selecting the right type of DAPR product is also critical. Because phosphate rock is a naturally heterogeneous ore, different sources of DAPR require a thorough agronomic evaluation, under both greenhouse and field conditions, according to Martin. Generally, relative agronomic effectiveness (RAE) is highest (>90%) for those rock types where P2 O5 is soluble above pH 5.7. Factors such as the reactivity, particle size and heavy metal content of DAPR are particularly important.

Latin America, due to widespread soil acidity and the large areas devoted to pasture, provides a great opportunity for DAPR. Brazil is already a sizeable DAPR market, currently importing around 200,000 tonnes annually through the port of Paranagua, mostly from Morocco and Peru. There is also great potential among the ‘Southern Cone’ group of countries. Parts of Argentina (Corrientes, Entre Rios and the Pampas) and eastern Paraguay could in future provide an annual market for DAPR of 70,000-100,000 tonnes and 50,000-70,000 tonnes, respectively.

Precise nutrient management in Brazil

Precision agriculture is providing Brazil’s farmers with a range of tangible benefits, according to Luciano Shiratsuchi of the LSU Ag Centre. These include improvements in the use efficiency, productivity, quality, profitability and sustainability of agricultural production.

The aim of precision agriculture is to maximise profits, not just yields. Achieving this typically involves a long-term crop and nutrient management strategy that incorporates no tillage, diverse crop systems and the use cover crops. For precise nutrient management, monitoring the vertical distribution of nutrients in the soil profile is as important as their surface spatial distribution.

The use remote sensing technology and plant and soil sensors is on the rise in Brazil. Precision agriculture is mainly delivered by consultants, such as hired agronomists employed by large farms as managers. The main commercial technology providers currently are Field View, Farmers Edge and Trimble.

Stabilised nitrogen fertilizers in Brazil

Stabilised nitrogen fertilizers (SNFs) already have a good market share in Brazil, according to Heitor Cantarella of the Instituto Agronomico de Campinas (IAC). Some 15 percent of urea consumed by Brazilian agriculture, for example, is currently stabilised with urease inhibitors (UIs). These reduce ammonia volatilisation, a major contributor to nitrogen losses from surface-applied urea.

Nitrogen fertilizers are applied across more than 100 million hectares in Brazil at application rates of 20-100 kg N/ha. Urea is the main nitrogen source with around 2.6 million tonnes N applied annually. While losses of nitrogen to the environment are not generally a pressing priority for Brazil’s farmers, larger agricultural corporations are highlighting the issue, and the sugarcane sector is also introducing legislation in this area.

Corn, cotton, fruit (oranges and bananas) coffee growing and pasture are all promising markets for stabilised nitrogen fertilizers in Brazil. “Prospects for increasing UI are very good,” concludes Heitor. The use of UIs are not effective in all circumstances, however, particularly when soils are highly acid or if long dry periods occur after fertilization.