After a year of price volatility for agricultural inputs, 2023 is set to be a “normal” year for fertilizer and pesticide costs, an official at top Canadian fertilizer maker Nutrien told Reuters on Monday.
Nutrien’s chief executive for Latin America Andre Dias said the war in Ukraine raised concerns in the sector and initially increased fertilizer prices this year.
“The war in Ukraine generated all sorts of expectations around a shortage of products. After May, prices began to fall,” he said, adding the value of inputs were cut by half.
Brazil, which imports around 85% of its fertilizer supply, faced challenges with product prices in 2022, Dias said.
He added that 2023 will be a more normal year with less volatility than 2022, with a more “settled” market despite what Dias said was expected Russian surcharges on fertilizers.
Dias reaffirmed the company’s plans to grow in Brazil via acquisitions and organic expansions, given the country’s agriculture and consolidation opportunities.
Over the past three years, Nutrien has acquired eight companies in the country, seven of which are retailers of agricultural inputs. In 2022, Nutrien invested $500 million in Brazil, including acquisitions.
Revenues in Brazil have increased 20 times in the period, and should end 2022 close to 8 billion reais ($1.50 billion).
Nutrien, which sells inputs under its own and third-party brands, also seeks to provide services for farmers, including financing and agronomic consulting.
Unlike the operation in North America, where Nutrien is also notable for its potassium fertilizer mines, in Brazil the company has four mixers for imported fertilizer raw materials and is in the process of investing in two more, Dias noted.
The executive added that, acquisitions aside, the company expected to end 2022 with organic expansion of 70% year-on-year.
($1 = 5.3226 reais)
(By Roberto Samora; Editing by Josie Kao)