Latin America Market Outlook Fertilizer Outlook and Technology Conference Blake Hurtik, Editor 15 November 2016 FMB London Houston Singapore Moscow Dubai New York Portland Calgary Santiago Bogota Rio de Janeiro Beijing Shanghai Tokyo Sydney Astana Kiev Cape Town Riga San Francisco Washington Market Reporting Consulting Events
Introduction and agenda Argus FMB: who we are Major market themes Brazil overview Argentina overview What lies ahead Market Reporting Consulting Events
Argus FMB Fertilizer FMB acquired in 2011 Founded in 1982, FMB leads global fertilizer coverage North American Fertilizer launched in 2012 Brazil Fertilizer launched in 2015 NPK report launched in 2016
Latin American market highlights in 2016 Venezuela urea, ammonia exports rebound Trinidad natural gas woes persist amid perfect storm New Bolivian urea plant nears start up Brazil imports rebound, but slow in 2H 2016 Chile s MOP exports at record high through July Argentina s new government regime a boon for ag sector, fertilizer imports rise Copyright 2016 Argus Media group. All rights reserved.
Trinidad ammonia exports 600 000 tonnes mn tonnes 4.7 500 4.6 400 300 200 4.5 4.4 4.3 4.2 100 4.1 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2014 2015 2016 4 Source: Central Bank of Trinidad & Tobago Exports Trailing 12 months, right
Latin American market highlights in 2015-16 Mexico diversifies urea import sources New US nitrogen production boosts UAN, ammonia, urea exports to Latin America Pemex buys Mexican phosphate producer Fertinal, exports down in 2016 CF/Mosaic ammonia supply deal to reshape Tampa cfr dynamic? Panama Canal expansion finally ends Copyright 2016 Argus Media group. All rights reserved.
Limited production, import reliant Latin America ammonia capacity of about 13mn t/yr in 2016 Urea capacity: 8.4mn t/yr (prilled and granular) Finished phosphate: 4.5mn t/yr Just 1.5mn t/yr MAP Small MOP production in Chile, Brazil Copyright 2016 Argus Media group. All rights reserved.
Latin American fertilizer consumption 14 mn tonnes N+P2O5+K2O 12 10 8 6 4 2 0 Brazil Mexico Argentina Colombia Venez Chile Peru Ecuador Guatemala Uruguay Other 2012 2013 2014 Source: IFA Copyright 2016 Argus Media group. All rights reserved.
Fertilizer consumption by nutrient (2014) 6 5 mn tonnes 4 3 2 1 0 Brazil Mexico Argentina Other N P2O5 K2O Source: IFA Copyright 2016 Argus Media group. All rights reserved.
Key Brazil crops 13 200 12 180 11 160 10 140 $/bushel 9 8 7 120 100 80 /pound 6 60 5 40 4 20 3 0 Soybeans Corn Sugar, right Coffee, right Cotton, right Source: Cbot, Ice
Brazil soybean and corn production 35 30 100 25 80 mn hectares 20 15 60 40 mn tonnes 10 5 20 0 0 Soy production, right Corn production, right Soy area Corn area Source: Conab
Brazil fertilizer imports 18 16 14 12 mn tonnes 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Urea MAP MOP Jan Oct Source: MDIC
Key Brazil fertilizer import prices 550 500 450 400 350 300 250 200 150 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 $/t cfr Nov 15 Dec 15 Jan 16 Mar 16 Apr 16 May 16 Feb 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Granular urea cfr MAP cfr MOP cfr
Brazil urea imports by port 2014: 83,000 2015: 79,000 2016 thru Oct: 93,000 Itaqui Aratu Total urea imports 2014: 4.4mn 2015: 2.8mn 2016 thru Oct: 2.9mn 2014: 485,000 2015: 392,000 2016 thru Oct: 385,000 2014: 584,000 2015: 429,000 2016 thru Oct: 437,000 Rio Grande Vitoria Santos Paranagua Sao Francisco do Sul 2014: 1.2mn 2015: 662,000 2016 thru Oct: 628,000 2014: 1.3mn 2015: 832,000 2016 thru Oct: 854,000 2014: 539,000 2015: 307,000 2016 thru Oct: 413,000 Copyright 2016 Argus Media group. All rights reserved.
Brazil MAP imports by port 2014: 175,000 2015: 234,000 2016 thru Oct: 118,000 Total MAP imports 2014: 3mn 2015: 2.3mn 2016 thru Oct: 2.1mn Itaqui 2014: 186,000 2015: 153,000 2016 thru Oct: 80,000 Rio Grande Aratu Vitoria Santos Paranagua Sao Francisco do Sul 2014: 581,000 2015: 612,000 2016 thru Oct: 439,000 2014: 229,000 2015: 104,000 2016 thru Oct: 206,000 2014: 1.2mn 2015: 802,000 2016 thru Oct: 742,000 2014: 101,000 2015: 48,000 2016 thru Oct: 130,000 Copyright 2016 Argus Media group. All rights reserved.
Brazil MOP imports by port 2014: 540,000 2015: 553,000 2016 thru Oct: 363,000 Total MOP imports 2014: 9mn 2015: 7.8mn 2016 thru Oct: 7.1mn Itaqui 2014: 878,000 2015: 840,000 2016 thru Oct: 648,000 Rio Grande Aratu Vitoria Santos Paranagua Sao Francisco do Sul 2014: 1.1mn 2015: 1.2mn 2016 thru Oct: 687,000 2014: 1.2mn 2015: 820,000 2016 thru Oct: 797,000 2014: 3.6mn 2015: 2.7mn 2016 thru Oct: 3.3mn 2014: 688,000 2015: 698,000 2016 thru Oct: 522,000 Copyright 2016 Argus Media group. All rights reserved.
Brazil volatile truck freight rates 90 $/t, 36 40t 80 70 Rondonopolis/Sorriso Rio Verde Uberaba/Uberlandia 60 50 Paranagua 40 30 20 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Rondonopolis Sorriso Uberaba Uberlandia Rio Verde Copyright 2016 Argus Media group. All rights reserved.
Exchange rate volatility: USD vs BRL 4.3 4.1 3.9 3.7 3.5 3.3 3.1 2.9 2.7 2.5
Speaking of volatility, the Mexican peso 21.5 21.0 20.5 20.0 19.5 19.0 18.5 18.0 17.5 17.0 May 16 May 16 Jun 16 Jul 16 Jul 16 Aug 16 Sep 16 Sep 16 Oct 16 Nov 16
Brazil market outlook Higher corn area for safrinha driven by higher prices Drought reduced prior harvest output, drained stocks Soybean area flat Rising global prices for urea and potash What does China do in 2017? Effect of new US production Phosphate prices under pressure New Moroccan capacity in 2017 Chinese producer to cut back? More consolidation?
Brazil for sale 2013: $750mn 2014: $350mn 2016: $590mn
Argentina does the Macri-ena
Macri reforms boost agriculture Eliminated export taxes for corn and wheat Corn plantings jump, production estimated up by 26pc from 2015-16 70 60 50 Argentina production Reduced soybean export taxes by five points to 30pc Floated the currency mn tonnes 40 30 20 Fertilizer imports jump 10 0 2012 13 2013 14 2014 15 2015 16 2016 17 Wheat Corn Soybeans Source: FAS/USDA
Argentina fertilizer imports for Jan-Sep 700 600 500 400 000 tonnes 300 200 100 0 Urea UAN DAP MAP Source: Indec 2014 2015 2016
US exports to Argentina pick up on new capacity 600 500 400 000t 300 200 100 0 2011 2012 2013 2014 2015 2016 (Jan Sep) UAN Ammonia Urea AN
Key price relationships Road to recovery Market Reporting Consulting Events
Granular urea 290 $/t 270 250 Lowest since Argus began assessing price in 2013 230 210 190 170 Brazil cfr Nola barge fob Middle East fob China fob
600 Phosphates $/t 550 500 450 400 350 300 Lowest since Argus began assessment in 2011 DAP/MAP cfr Argentina MAP cfr Brazil DAP fob Tampa
430 Potash $/t 380 330 280 Brazil prices hit lowest since 2007 230 180 Brazil granular, cfr Nola barge granular fob Vancouver standard fob
Questions?
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Blake Hurtik Editor, North American Fertilizer Email: Phone: Office: Web: blake.hurtik@argusmedia.com +1 713 360 7590 Houston www.argusmedia.com/fertilizer Stay Connected @ArgusFMB +Argusmediaplus Argus-media argusmediavideo Copyright notice Copyright 2016 Argus Media group. All rights reserved. All intellectual property rights in this presentation and the information herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this presentation you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus. Trademark notice ARGUS, the ARGUS logo, ARGUS MEDIA, ARGUS DIRECT, ARGUS OPEN MARKETS, AOM, FMB, DEWITT, JIM JORDAN & ASSOCIATES, JJ&A, FUNDALYTICS, METAL-PAGES, METALPRICES.COM, Argus publication titles and Argus index names are trademarks of Argus Media Ltd. Disclaimer All data and other information presented (the Data ) are provided on an as is basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law. FMB