By Nayara Figueiredo and Roberto Samora
SAO PAULO (Reuters) – SLC Agrícola, one of Brazil’s largest grain and oilseed producers, said on Wednesday it had anticipated negotiations to purchase inputs for the 2022/23 crop amid tighter supply of fertilizers due to the war. in Ukraine.
The company closed 83% of the need for potassium chloride for the 2022/23 crop, to be planted from September.
“We are well ahead of purchases… the expectation was to start buying fertilizers in May/June, we thought the price could drop even further, but then the war came and radically changed the scenario”, said the president of SLC, Aurélio Pavinato, in video conference.
He stated that the purchases of pesticides were also anticipated, as negotiations traditionally begin in March, and this month there are already products purchased.
The concern to ensure potassium occurred because the fertilizer starts to be applied on the company’s farms during the off-season, between June and July. This is the main input supplied to Brazil by the Russians.
“The big discussion is how much Russia and Belarus will be able to send fertilizers,” said the executive.
In the case of nitrogen, Pavinato explained that the application takes place later, until the planting of the second crop of corn and cotton, which justifies waiting for the evolution of the market.
“Our use of nitrogen goes from November to April of next year… We still have time to buy fertilizers, we can wait and see what will happen”, he added.
In a report the day before on the results for 2021, when SLC’s profit exceeded 1 billion reais for the first time, the company said that it has already purchased 49% of the phosphate fertilizers, in addition to 59% of the pesticides it will need for the new crop.
The company, which has farms in Mato Grosso, Mato Grosso do Sul, Maranhão, Piauí, Bahia and Goiás, declared that it did not buy nitrogen fertilizers, which can be traded “until the end of the second half of 2022”.
“The exchange ratio between the price of commodities and fertilizers is being monitored and the rest of the inputs will be negotiated at the best moment”, said SLC, at a time of high agricultural products.
Inputs, on the other hand, are subject to cost pressure due to high oil prices and supply issues, since Russia is a major supplier and, in general, the largest exporter of fertilizers to Brazil.
“The hedge policy is well structured and aims to guarantee a good level of margin for the company. Given the fixing of part of the inputs, we advanced in the hedge for the 2022/23 crop, reaching good prices both for commodities and for the exchange”, he said.
In this way, SLC said, the expectation is that the increase in costs will be offset by the increase in revenue through higher prices, maintaining margins at the levels of recent years.
“Input prices are high… what remains to be bought, it is not known at what price you will pay…, but so are commodity prices, and with that we have a view that we will maintain good margins in 23”, said the CEO.
RESULT IN 2021
The company had a net profit of 1.13 billion reais in the fourth quarter, a growth of 153.3% compared to 2020. The net margin was also a record, 25.9%, with an increase of 13.2 points.
Adjusted net debt ended 2021 at 2.4 billion reais, up 1.7 billion in 12 months, mainly impacted by the increase in the need for working capital arising from the volume of payments for agricultural inputs for the 2021/22 crop and the settlement total indebtedness of Terra Santa Agro.
know more
+ Omicron: Unexpected symptom of infection in children worries medical teams
+ Mercadão de SP vendors threaten customers with fruit blow
+ Video: Mother is attacked on social media for wearing tight clothes to take her son to school
+ Horoscope: check today’s forecast for your sign
+ What is known about fluorone?
+ Trick to squeeze lemons becomes a craze on social media
+ ‘Ichthyosaur-monster’ is discovered in Colombia
+ One twin became vegan, the other ate meat. Check the result
+ See which were the most stolen cars in SP in 2021
+ Expedition identifies giant squid responsible for ship sinking in 2011
+ US Agency warns: never wash raw chicken meat
#SLC #anticipates #purchase #inputs #circumvent #scenario #potassium #ISTOÉ #MONEY