SAO PAULO, Brazil (Reuters) — Higher transportation costs in Brazil following a truckers’ strike that crippled the country’s logistics will hurt fertilizer demand this year and may slow the growth in soy acreage in the next season, analysts said.
Brazilian demand for fertilizer will fall this year for the first time since 2015 due to disruptions caused by the strike and increased transportation costs after the government agreed to set minimum freight prices in a deal to end the demonstrations, according to INTL FCStone analyst Fábio Rezende.
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The strike began in May with hundreds of thousands of truckers moving to block highways for 11 days, choking up shipments of supplies ranging from consumer products to animal feed. Brazilian logistics took weeks to return to normal, with many contracts to deliver grains and fertilizer held up over uncertainty about how the government would set minimum freight prices.
The situation is delaying farmer planning for the coming soybean and corn seasons, which starts around September, Rezende said at an event in Sao Paulo.
Brazilian farmers will likely buy 3.7 percent less fertilizer this year compared to 2017, or 33.17 million tonnes, according to the consultancy.
Fertilizer trade group Anda said deliveries fell 2.3 percent to 12.83 million tonnes in the first six months of the year, weighed down by the trucker protests.
Uncertainty over freight prices will linger until transport regulator ANTT updates a table setting minimum prices following recent congressional approval of government-set prices.
Higher freight costs may also limit the growth of Brazil’s soybean area in the next harvest, INTL FCStone analyst Ana Luiza Lodi said at the same event, declining to provide an exact projection.
