I can see that one of our shareholders, he's actually attending the call. He's a medical doctor. His name is Daniel Solomon. He's been working in two different hospitals fighting the crisis here in Brazil. What I'd like to suggest before we begin the presentation is that we all hold a 30 seconds moment of silence in respect for everyone who is right now in the front line, trying to save lives and doing everything they can to help our friends and family get over that. Let's just wait for 30 seconds in silence. Thank you. Okay. We will begin now. Before I begin, I would like to remind you that this presentation will have some forward-looking statements and actual results may be different. The agenda for today's phone call, we will begin with the highlights for 2019, which I'll be presenting.
Felipe Paolucci, our CFO, will present the financial results for the fourth quarter and full year end. After that, I will present the outlook for 2020. After that, we will be hosting a corporate presentation, where we're going to be updating on the impact the crisis is currently having in Verde, go into a little bit more detail in our business plan. To finalize, we are going to have our Q&A. To begin, you should all be seeing now. Hang on. There's just a technical problem here with Zoom. I just want to make sure this call is being recorded. Yeah. This call is also being recorded. At the end of it, you're going to be able to see it on our channel on YouTube. At the bottom of your screen on Zoom, there is an option which says Q&A.
Throughout the presentation, you can write down questions, and then at the end, we're going to go through each one of your questions and try to translate as many as we can. Well, just before the highlights, just a quick reminder of what we do. You can see on the right-hand side a photo of the plant during the rainy season, so you can see how it gets all muddy and messy. We are mining, producing, and selling a potassium silicate mineral. It is sold in Brazil as K Forte and globally as Super Greensand. Brazilian agriculture is very important for the world. We represent about 10% of global agricultural production. Our product has clear advantage for Brazilian farmers to switch from conventional potash to our product. We only began commercial production in July 2018.
We have proven and probable reserves of around 800 million tons. As you may remember from the history of Verde, we invested a lot of money drilling out this reserve and coming up with all the necessary regulatory work required to validate it. The full project, as it's conceived, and that it's written in a public pre-feasibility study, has a net present value of $2 billion. The highlights for 2019, we were issued some very important relevant license throughout the year. Environmental license, we were issued about 249,000 tons. For mining permits, we were issued about 400,000 tons per year of additional capacity. We've been able to strengthen the team in key positions. We've hired three senior executives.
Felipe Paolucci, who is our CFO and is underneath me on the video here, wearing a green shirt. We've hired Thiago Pacheco as our Vice President Sales, who begun in December last year, replacing the previous one we had. We've also hired a Mining Director, Elton, who's also doing a fantastic job. In addition to that, we've hired 10 new employees in the operational capabilities, this in 2019, who altogether have strengthened the company. We currently operate a plant with capacity for 500,000 tons per annum . We've commissioned a second mine, which is in operation. We have over 400 customers and over 100,000 hectares already treated with K Forte, and we've developed new markets for Super Greensand. We've developed the Canadian market, and we've started exporting to China as well in 2019. Now, Felipe will be presenting the 2019 fourth quarter numbers as well as the full-year consolidated results.
After that, I will carry on with the outlook for 2020 as well as a short presentation on where we are in the business. Felipe, please go ahead.
Okay, Cristiano. Yeah. No? I'm muted. Hello, Cristiano?
Yeah, we can hear you.
Can you hear me?
You, yes.
Okay.
Go ahead, please.
Hello. Good evening for everyone, or good morning. I'm going to present now Q4 2019 and Q4 results. I've chosen some points to highlight here, and we'll be able to answer questions by the end of this presentation. Talking a bit about Q4 2019 versus Q4 2018, we can see that our sales have grown over 115%, from CAD 692,000 in 2018 to close to CAD 1.5 million. Volumes also grew significantly in Q4, from 20,000 tons to 32,000 tons in Q4 2019. It's important also to highlight here gross margin. We can see that increase from 4%-36%. This is mainly driven by fixed cost dilution. Once we grow, we can dilute fixed costs and also improve our margin.
The good point to highlight here in Q4 results, that this was the first quarter that we show a positive operational profit of CAD 38,000, and a net profit loss of CAD 79,000 in the quarter. This is a great achievement for the company since it's the first quarter that we can see a positive result in the financial statements. Going to the next slide, we can see the full year 2019 versus 2018. Cristiano, could you please move to the next chart? Yes. In the next chart here, full year 2019, we can see that sales achieved 120,000 metric tons, close to 344% higher than prior year in value and also in volume.
A good point to highlight also, we were able to increase CAD 5 per ton in our price and reduce our cost over to CAD 10 per ton, which results to us in a gross margin of 48% versus 21% in the prior year. Coming to the operation profit and loss before cash events, it's also good to highlight was the first time that we see a positive result here compared to 2018 of a negative result of CAD 1.4 million. In the end of the day, the net profit loss, we had a loss of CAD 1.1 million compared to CAD 1.7 in 2018. These are the key numbers I would like to highlight in this conference. More details and information also are out in our financial statements and MD&A.
Of course, we are always here to answer doubts or questions during the next days or any time you like. Cristiano, I'll pass through to you again.
Thank you. Thanks, Felipe. We're going to carry on with the presentation. Next part of it is a slide with an outlook for 2020. I can see that there's still about 10 people who connected via the phone. I'll try to describe as best as I can what is written on each one of the slides. The outlook we have here is, as a matter of fact, into mid 2021. In a first scenario here, assuming there's no additional production which is permitted. In that scenario, we have a capacity to produce 500,000 tons, but we're only permitted to produce 198,000 tons. For us to achieve a breakeven point, we will need to sell 140,000 tons this year. That's the all-in breakeven point. The target for 2020 is far greater than that.
It's about 220,000 tons, which would give us revenues of about CAD 10.6 million, representing an increase of 76% year-on-year. One very important point here is that we are on track to achieve this. As of the date of this presentation, the company is on track to deliver on its sales target of CAD 10.6 million. In that scenario, we project cash in the bank at the end of June 2021 to be CAD 2.8 million. This comes from a note in our financial statement, which was filed on SEDAR on the 30th of March. The next slide presents another scenario where we would be issued additional permits, and therefore we would be allowed to produce and sell more.
If that is the case, and if you want to extrapolate the impact this will have in our results, you can use 2019 numbers as your guideline. You can use the revenue per ton from 2019 for CAD 50, as well as the production cost from full year 2019 of CAD 26. Just one important point we need to take into account, there has been some pretty strong FX movements from the Brazilian currency to Canadian dollars, as well as oil price. There might be some impact on the income statement, the balance sheet. Nevertheless, the numbers from last year still remain as a good reference for calculating. The next slides now, I will be giving a bit more of an update on the business, where we are.
For some of you who have already been following the company for a while, a lot of the information will be repetitive. I can see from the list of people attending the conference there are a few potential new shareholders. There's some names here which have been started recently to follow the company. I reiterate that there is the Q&A option on Zoom, which you can just type in the questions and at end we'll be addressing them. The first point some of you might be asking yourselves is how is this current crisis impacting Verde? Very little, to be honest. Right at the beginning, the Minister of Agriculture in Brazil declared that fertilizer production was an essential activity in the food and beverage production chain.
We not only are allowed to carry on operating, but we have experienced an increase in terms of demand and people trying to lock in supply of fertilizers at an earlier date, a bit concerned about potential impact in the global supply chain. What has also changed with the crisis is that the price of all relevant or the most relevant commodities, agricultural commodities in Brazil, the price went up a lot when you look at those prices in Brazilian currency. You can see soybeans going up from about BRL 88 to over BRL 100 throughout the crisis. You can see the price of corn going up from BRL 50 back in the beginning of the year to about BRL 60. You can see the price of coffee as well, going up above BRL 550.
What has also changed, which has benefited Verde, is the weakening of the Brazilian currency. Since the crisis begun, the Brazilian real has weakened from an exchange rate of about 4.10 all the way to 5.20. A weaker currency is very positive for farmers who are paid, of course, in U.S. traded commodities. It's also very favorable for Verde because our competition, potassium chloride, is traded in U.S. dollars. It makes those imports more expensive. The other change you can see on this slide 17, was that the interest rate in Brazil, which had already been coming down a lot, suffered a massive decline in the last few weeks. In the beginning of last year, it was 6.5% brand new, the base interest rate, and it's currently 3.5%.
It's now cheaper than ever for farmers to borrow money to expand their planted acreage, to make more investments and to grow more. To finalize in terms of the impact in the crisis, there's something which is very relevant in agriculture, which is the exchange ratio between how many bags of a given commodity are required to buy a ton of a certain fertilizer. This exchange rate, which in March, before the crisis, was that you had to use 11 bags of soybeans, it's now gone up to 17. Again, making it the best exchange ratio operation for farmers in several years. The next part of the presentation now, we're going to remind you how Brazil is playing a key role in terms of feeding the world in a sustainable way.
First of all, the acreage, the amount of land used in Brazil for agriculture is greater than five of the largest countries in Europe. The other aspect to take into account is this, what is on slide 21. Brazilian farmers are actually the world's biggest forest protectors, even though Emmanuel Macron wants to convince you otherwise. On slide 21, you can see a first map showing each country, what percentage of the total country is protected area. You can see that in Brazil, over 45% of the country is protected by law. Whereas most of the other countries is something between 17 and 14. The other chart here shows who are the ones who protect this land by law.
You can see that in Brazil, it's about half of all this land protected, all those forest protectors were actually protected by farmers, because there's a limit in terms of how much land they can farm and how much land they can protect. About 50% of all this massive land is actually protected by Brazilian farmers. The other information on the slide I'd like to highlight is a comparison between Brazil and U.S. in terms of how much of the country is rural area, agriculture area, and how much of the country is protected. You can see that in Brazil, about half of it is protected, 50%, and 30% of it is used for agriculture. In the United States, 74% of it is used for agriculture and only 12% of it is protected land.
It's a pretty good slide in the presentation for anyone who wants to share some information about how sustainable, what an example to the world Brazil's agriculture is in terms of sustainability. The slide on the importance of Brazil's agriculture to the world. We are either number one or number two in exports of some of the world's most important commodities. We're number one in soybeans, number one in coffee, number one in beef, number one in chicken, number one in sugarcane, and number two in corn. Next slide or next section of the presentation, it's a little bit on the Brazilian dependency on imported potash. Brazil is the world's biggest importer, the second largest consumer of potash. Last year alone, farmers spent about $5.4 billion buying potash.
All this potash, it's about 10 million tons of potassium chloride, this adds to soils annually about 5 million tons of chloride. That chloride causes a number of problems to the environment and to our health. By switching from potassium chloride to our natural fertilizer, there's some big benefits to Brazil and some big benefits to the world. I have a very quick break here just to get a cup of water. As you can see, my voice isn't the best at the moment. I'll be back in 30 seconds. Excuse me. I'm back now. Can you guys hear me? Can you hear me, Felipe?
The video's not working yet. Camera.
Okay, thanks. I'm back now with some water. The first problem you have with chloride is that it has an impact on global warming. Chloride kills some soil microorganisms, which are essential for capturing carbon into your soils, and when you apply potassium chloride, you're essentially destroying one of nature's most efficient ways of storing carbon. The other benefit you have from eliminating chloride from potassium fertilizers is that you reduce the amount of issues to the environment of a substance called dioxin, which is responsible for causing cancer. This is especially important for sugarcane. You have about 10 million hectares of sugarcane grown in Brazil, and when you replace potassium chloride, a lot of that sugarcane, which is burned as the production process for ethanol, and you eliminate the issuance of dioxins.
The third benefit the world has to replace potassium chloride with our product is your health. Unfortunately, nowadays, farmers, they're only compensated by the appearance and weight of the food they produce. For the appearance, they apply pesticides. For the weight, all they apply are chemical fertilizers, your NPK, nitrogen, phosphate, and potash. When a farmer replaces potassium chloride as a source of potassium with our product, in addition to applying potassium, he will also be applying another 60 other trace elements, which are very important in increasing the nutrient density of food. We allow farmers, without increasing their costs, to start growing much healthier food than they've currently been doing. Beginning the final part of the corporate presentation, which is in terms of our business model and the expansion.
As you know, we mine, process, and sell a unique multi-nutrient fertilizer, which in Brazil is sold as K Forte, whereas it's exported as Super Greensand. Our product is made of a potassium mineral called glauconite. Glauconite has been used as a fertilizer for over 250 years. Whereas it was widely used in the U.S., where millions of tons of it were spread over the soils throughout the centuries, more recently, it was only sold as a premium potassium fertilizer because the mine was running out of ore, and they would only be supplying to organic growers charging a very high price for it. Our mine, though, is very big. As I mentioned, we already have 700 million tons in reserves. In addition to that, we have another 1.4 billion tons in resource.
The volume is so big that instead of focusing in a niche premium market, we're actually going after the main market. We are competing against the cheapest source of potassium, i.e., potassium chloride, even though our product has numerous benefits. This big reserve, this big market, gives us a very impressive net present value of about $2 billion. At the moment, we're trading at about 1% of this $2 billion. The internal rate of return is pretty high as well, at close to 300%. One reason those numbers are so good is because our delivered cost to Brazil is smaller than any other competitor, which isn't a surprise. You can see how we can land the product on an equivalent basis here, okay? For about half of the cost of our nearest competitor, which indicates the cheapest one would be coming from Uralkali in Russia.
Capital expenditure for our project is also very small. This slide number 35, it compares the capital expenditure between Verde and the last potassium mine built, which was built in Canada by K+S, the Legacy Project. In Canada, the CapEx per ton of K₂O production capacity was CAD 2,830. Whereas our cost, based not only on a feasibility, on a study, but based on the actual cost we put on the ground to build the operation, is CAD 44 per ton of K₂O production capacity. The reason it's so much cheap, of course, to produce our product, because in our case, the mine is an open pit operation with very simple transformation technology. Whereas a conventional potash mine is as deep as 2,000 meters and can take anything from five to 10 years to be built.
The other important thing to say on this slide here, this expansion was built from cash flow and some debt. The other problem we have, explains a lot why we are at such fraction of this net present value is what we can see here on slide 36, which are the permits. To fulfill that feasibility study at $2 billion NPV, we will need to be producing 25 million tons per annum. Unfortunately, right now we are permitted to produce only 200,000 tons. You can see the breakdown of those 200,000 tons in this table below. The same table is available in our MD&A filed on the 30th of March. You can see from mine pit one, we currently have 233,000 tons granted in terms of mine permit already, but we have zero granted in terms of environmental license.
For mine pit one, we're waiting for this environmental license in order to be able to mine 233,000 tons per year. On mine pit number two, we have 150,000 tons already granted. We have a pending application for an additional 50,000 tons, and we already have, in this pit, an environmental license for 200,000 tons. The third pit is fully licensed for about 50,000 tons. All to say that this year, we do expect to have all those permits, we have pending applications currently to be issued. We're hoping they can be issued before the middle of this year. If that is the case, we will be able to produce as much as 432,000 tons this year. That's what we're working on to get those licenses issued as well. This next slide shows our growth.
As you know, in 2017, we began with a little pilot plant, which we rented. Our revenue was about CAD 138,000. In 2018, revenue increased to CAD 1.3 million. Last year it went up about four, five times to CAD 6 million revenue. You can see the target for 2020 at CAD 10 million. Then you can see the revenue target when it comes to phase II and phase III at CAD 195 million and CAD 692 million. At the bottom of the slide, you have our market share. At the moment, our market share in Brazil is 0.19%, so really nothing.
For this year, if we can accomplish our target of CAD 10 million, our market share in the country is still going to be very small at 0.35%. It will only really start having an impact in terms of market share once phase II and phase III kicks in. Important to say, potash market in Brazil have been growing an average 3% every year. The next slide, we go into a little bit of detail on how or why we expect to be increasing sales this year. In this slide, we compare our sales efforts from 2019 with 2020. In 2019, we had 11 people working with sales and marketing. Nowadays, we have 27 people working with sales and marketing at Verde. In terms of independent sales agents, people who are not employees but get paid a commission for selling our product. In 2019, we had 41 sales agents.
In 2020, we already have 85 sales agents selling our product in Brazil. We've also increased the number of distributors. Distributors, different to independent sales agents, it's a shop, it's a corporate structure. In 2019, we had 13 distributors who all together had 28 stores in different parts of Brazil. In 2020, we already have 22 distributors with 39 stores in the country. The sales team, by those distributors in 2019, there were 89 people working for them selling K Forte. In 2020, we are now talking about 161 people from our distributors helping us. When it comes to selling the product, something else which is very advantageous for the farmer is the fact, even though it's a better product, we don't charge more for the product.
On this slide, you can see the comparison between the delivered cost of potassium chloride to the delivered cost of K Forte to the farmer. If a farmer now currently spends BRL 1,500 to get product delivered to its farm, how we price our product is to divide that number by six, because our product, as you know, has six times less potassium. You get to BRL 244, and that is the cost. We can turn to the farm and tell him, "Look, if you are currently spending $1 million buying imported potash to your farm, we can change that. You're going to carry on spending the same amount, and you're going to get the same quantity of potassium delivered to your farm. However, you're going to get for free a number of micronutrients.
You're going to get a number of agricultural benefits, such as the absence of chloride, which is a problem for root development. Lack of salinity, which is a problem as well for crops, and a gradual release of nutrients, which is more important. There are a number of advantages here for farmers to get for free when they switch to our product. Even though we sell the product very cheap in Brazil, I always remind shareholders and farmers in Brazil as well that there are plenty of people paying as much as $3,000 per ton for exactly the same product. It's sold on Amazon, among other retailers in the United States, and I like to say that this is a validation of how superior the product is in comparison to conventional potash. The next slide. The reason farmers are switching from potassium chloride to K Forte.
It costs the same, as explained. It has those free benefits. It has free silicon, free manganese, free magnesium, free cobalt, free zinc. It's chloride-free, it's salt-free. Finally, it's a more convenient product than potassium chloride. If you're applying potassium chloride, you have to split your applications. If a farmer can't go and apply all of it at once, because if it rains a lot, you're going to lose a lot of your nutrients. Depending on the crop, which if the crop requires a lot of potassium, like coffee, for example, and you apply at once all the potassium the crop needs, it will literally kill the plant because of salinity. In several crops, they need to split applications as many as four times.
With K Forte, because it's a gradual release fertilizer, you can make only one application and resolve the problem for a given year. The next slide, it shows one thing we like to highlight all the time about how our business plan is predicated upon the fact we can self-fund, self-finance our development. We still have just around 40 million shares after being listed since 2007. This slide here, slide 42, helps to illustrate how we can carry on growing without having to dilute ourselves as shareholders. You can see the total capital expenditure we had for building a plant with a production capacity of 500,000 tons. The CapEx was CAD 2.3 million. That plant, if it runs at 100% of capacity, it generates free cash flow of CAD 14 million.
If you think about that plant as modules, you can see that just by running that plant at 100% capacity, you can essentially build about six new plants to produce an additional 3 million tons of capacity. If you don't want to wait until you're producing at 100% capacity, if you want to look at half of capacity, you're still generating enough cash flow at 50% of capacity to build three of those modules, which would give you an additional 1.5 million tons. I like to think that Verde has declared itself independent from capital markets, independent from having to raise funds. Next slide is one I hope to help shareholders to understand how the crop planting season takes place in Brazil, and when farmers apply our product, and why some quarters are more relevant to us than others.
If you look at soybeans, the time of the year when K Forte is applied, it's essentially from May until August. That's when most of the farmers will be applying it. When you look at corn, it's May until July. If you're looking at cotton, it's from June until September. If you're looking at coffee, it's from May until September. If you're looking at sugarcane, it's essentially from March until September. You can see why most of our demand takes place between June and August every year. For those of you who aren't looking at the presentation, this slide also shows when each crop is harvested in Brazil, when planting season takes place. It's an important one to have to understand the dynamics in agriculture in Brazil. Finally, our capital structure. It hasn't changed a lot.
We have about 50 million shares, fully diluted, 46 million shares outstanding. Management of the board, we carry on being paid in shares, not cash. You can see here on the slide, the breakdown of how many shares we have to issue for each one of the capital raises we did since the pre-IPO round when I began the company back in 2005. To finalize, before we go into the Q&A, several reasons to invest in Verde. We are in production. It's a massive reserve. It's a scalable project. The product is, and has been disruptive in the Brazilian market. We have very few shares outstanding in comparison to most of the other companies who got to production. Dr. Alysson Paolinelli remains being our huge support, a massive name here in the Brazilian agriculture sector, our Director. There's a lot to happen for 2020.
This concludes the presentation. I can see several of you have sent questions. I will go back here to the beginning of the presentation and start addressing each one of those questions. We have 11 questions here. I hope I can answer most of them.
First one, of the customers who bought back in 2018, how many bought again in 2019? Did some fail to repeat buy? Of those who did repeat buy, how much more did they buy? Did some buy five times more than in 2018, for example?
There's several questions here. The first one, several of our customers bought back in 2019. However, not as many as we wanted. The ones who failed to buy the product back, it was our fault. Last year, our CRM, customer relationship management system, wasn't great, and how the sales procedures had been structured also wasn't very effective. We made a terrible mistake. It was so bad that in some cases, farmers just didn't buy it back because we didn't contact them. In some cases, we contacted them, it was a bit too late. They had already bought from someone else when we finally approached them. This was a massive mistake we made last year. It has been fixed. Now we've specialized our sales team. It's already delivering much better results. We've implemented Salesforce, which is the world's number one CRM, and we can see how effective it is.
Answering the last part of the question here. Yes, there has been cases where people went from buying much more than five times. Let's say I can think of one farmer here who went all the way from buying one truck to buying 5,000 tons. Buying 30 tons of product, going to buying 5,000 tons of product. That was there. We saw this growth in a number of situations. The next question.
Is the product listed for sale on Amazon but hasn't been available for months? Is this the case?
In the U.S., it has been available. A couple of our products run out of stock, which is perhaps good news, and we always replace this stock around now because most of the demand takes place now when it's beginning of spring, summer in the northern hemisphere. The problem we had when we went to replace our stock with Amazon this year was that Amazon is not taking any stock that isn't essential because of the crisis. A number of items are out of stock, and they're not taking it, they're not allowing us to refill some of the products we have for sale.
Another question. Your CFO mentioned cost at CAD 10 per ton, while Chris said CAD 26 per ton. Is CAD 10 an operation figure while CAD 26 is all in, including SG&A, et cetera?
Felipe, do you want to respond to this one?
Yes. Sure. Can you hear me?
Say again.
Now you can. What I've mentioned, just to make clear, is not that the cost is CAD 10 per ton, but the cost decreased CAD 10 per ton year-over-year. The production cost per ton in 2018, it was CAD 36, and now 2019, it was CAD 26. This is the difference. The CAD 10 is the difference between 2018- 2019.
Thank you, Felipe.
No problem.
The next question.
When you sell a ton of your product, what are you displacing? We're displacing potassium chloride. What is the cost per ton of the product you are displacing?
The cost per ton of the product we're displacing is BRL 1,500-BRL 1,600. That's how much it costs. Next question.
What is involved in your company getting the necessary approvals to increase your permitted output? What levels of government are involved? Cost. Are there any incumbent lobbying groups that are fighting your desire to expand?
It's bureaucracy. What's necessary to get the approvals is that there's a line, a big queue of projects. There aren't enough people to look at all those projects, and it goes through a very painful queue. We hope that this year we will be issued some more of those licenses. There isn't an incumbent lobbying against us or anything which has been an issue that has affected the capability of us getting license issues. The next question.
Are you considering midterm risks associated to a scenario where negative GDP impact and unemployment might lead to logistics issues and/or social unrest that could affect business?
Starting with the last question in terms of social unrest. Brazil has acted fast in terms of providing money to the population which will be most impacted with the crisis. There is a version of helicopter money going on into Brazil, which has reduced the risk of something like that happening. The first part of the question is the impact it might lead on logistics. Far there has been zero impact in terms of logistics. All truck drivers, which we rely on to deliver or carry on business as usual, the price came down because there's less product to be moved at the moment. The freight rates came down. Diesel, of course, came down as well. We're actually getting cheaper costs in terms of logistics now than we were same time last year. The next question.
Is any update or traction with the Marketplace Initiative?
The Marketplace was something we launched last year where we are going to try to find buyers, traders who were interested in sourcing agricultural products from farmers who were more concerned with sustainability. Essentially, every time a farmer uses our product, they can grow healthier food, they can have a positive impact to the environment. We hope, and the Marketplace was the initiative for that, we hoped we could be finding those traders. Even though we still believe it's a massive opportunity, it has been on hold. We haven't had chance, power, manpower to focus and fully develop this initiative, but it is in our pipeline and we hope to resume that at some point. The next question.
Given the overall aspirations and importance of Brazil for Verde, don't you think it would benefit the business to list in Bovespa?
It is something we should definitely take into account for the future. The problem, though, with Bovespa is it's a very illiquid market. Small caps, medium caps in Bovespa, the trade is extremely thin. It's something much far in the future and something to be considered. What I can also say is that a lot of the Brazilian funds, and we have Brazilian funds as shareholders, we have Brazilian retail shareholders. They can also buy international stocks by getting an account with an international trader. We have a few examples. The next question.
What does it cost the average farmer in application costs per hectare, labor, et cetera?
It varies a lot. I presume you're thinking about our product. I presume this question is how much it costs for the average farmer to apply our product per hectare, labor and equipment and diesel. What we did, which helps answering this question, we did a calculation, which was, if a farmer wants to apply 100 kg of K₂O, potassium oxide, he can apply with KCl six times less product than if he applies K Forte, which is six times less concentrated. What we worked out, which is what I think you're trying to work out with this question, is how much more per ton of product a farmer has to spend to apply our product in comparison to potassium chloride. The number is in average BRL 8. BRL 8. Exchange rate to U.S. dollars at the moment is about 5.2.
Those BRL 8, what we do when we sell our product here in Brazil is to deduct that from our delivered cost to the farmer. Essentially when we sell the product in Brazil, it costs to the farmer the same amount as potassium chloride, not in the farm gate, but applied to the soils down on including these application costs. Good question. Allowed me to go into a little bit more detail in terms of how our pricing is done. Next question.
I can see they keep growing. Has been much in the way of customers from 2019 pre-ordering your production for 2020?
Yes. We had a lot of our 2019 customers who have already reordered, have already made a down payment for deliveries in 2020. As I said during the presentation, as of present, we are on track to deliver our stated goal of selling about CAD 10 million in 2020.
The other question, can you undercut on price even more to win market share?
Yes, we can and yes, in some circumstances we do undercut the price even further. We have an aggressive pricing strategy when it comes down to bigger volumes. Yes, we use that low cost we have as a benefit for our expansion. Next question.
Are you able to sell into China cheaper than the big players?
It's a good question. We can't sell into China cheaper than potassium chloride. Potassium chloride will always get delivered there cheaper than our product. When we sell to China, it's not against potassium chloride that we compete. Our distributor in China positions our product against an upcoming potassium mineral called polyhalite, which became a little bit more famous because of Anglo American's acquisition of Sirius Minerals in the U.K. That product is currently sold globally by ICL, the Israeli potassium producer. This distributor, essentially, that's how he has positioned. Yes, when we sell to China, we're not selling it with the price as high as we do when we sell it in the U.S., where the focus is really the premium market, the organic market. In China, the focus is on competing against polyhalite, against potassium sulfate. Yes, we are price competitive against those products.
The next question.
What is the lead time for farmers placing orders ahead of fertilizer application?
It varies a lot. You have some organized groups who have already placed orders last year to take the product in June, July, October this year. There are lots of farmers who leave up to the last minute to place their orders. There isn't a rule of thumb when it comes to that.
The next question comes from a Senior Executive from a very large Fertilizer company. He's asking, what about the R&D work to prove K Forte is effective as a replacement to KCl? Is there any university trials conducted or being conducted?
The first part of the question, There's tons of R&D work done proving K Forte is effective as a replacement of potassium chloride, as well as nearly four years of commercial usage. Is there any university trials conducted or being conducted? There has been several university trials conducted since 2008, and we have other trials currently being conducted in specific circumstances, not to prove whether or not the product is effective, but to prove some additional benefits of the product. For example, we have some interesting studies going on trying to measure how much more carbon our product can lock into soils against potassium chloride. We have some other interesting works looking at how our product positively impacts seed germination versus potassium chloride, which the chlorine and the salinity impacts it.
We're beyond the stage of trying to prove efficacy. This is being done and completed for between 2010 and 2016. Now we are in a different stage.
Another good question here. How is management paying the income tax on the deemed income received as shares?
It's from whatever assets they have accumulated throughout life and saving and family savings and everything else. The key question here is myself as management. That's sense. It's family money. It's saved money, which had been saved, and that's how I pay the taxes. The next question.
Are there any plans to produce a granular product to make it more attractive to potential buyers?
Yes. This is something we've been looking at, but it's not a priority at the moment because we believe the size of the market for the product as it is in powder format is still so big, and there's so much market to be developed for the product as it is before we start acquiring our own CapEx on a granulation plant. The next question is.
What crop is currently the biggest user of Verde's product?
The crop that's currently the biggest user of Verde's product is coffee. You can help us by next time you go to a coffee shop or to a restaurant, asking the guy, the waiter, whenever you're allowed to go back out, you can ask for some chloride-free coffee, you're going to get some very puzzled face. What is a chloride-free coffee? You can tell them how much potassium chloride most coffee farmers have to apply how about half of all coffee sold globally comes from about 300 km from where our plant is located. The next question.
Does a customer buy only once a year during his farming time?
Yes. Most of the farmers will make one purchase per year. There are exceptions. As the answer here would be yes, it's only once every year. In terms of our product, okay? Our product, different to KCl, different to potassium chloride, can be applied once per year. If you're buying potassium chloride and you're growing, let's say, coffee, yes, you may have to buy it in different installments up to four times per year. If you're growing soybeans and then planting corn, you're going to be doing it a couple of times per year. The next question.
The non-season times, are we still in production? Does that mean sales go to zero?
During the non-season times, which coincides with the raining season of Brazil from November until March, we bring production close to zero. I say close to zero because the mine has to stop producing. The plant, we can still produce a small amount of product depending on the weather, depending on demand. That's how we operate. The last question.
Are you speaking to any of the huge corporate agri players in Brazil rather than just private farmers?
The answer is yes. We're not only speaking to the huge corporate agri players in Brazil, but also a bunch of them are already our customers and have been increasing the acreage planted with K Forte. Ladies and gentlemen, that completes all the questions we've received so far. I would like to thank all of you for attending our first video conference call. For the ones who joined via telephone, I recommend next time to try connecting via Zoom so you can benefit from the slide. I would like to thank you. We're very excited for 2020. We think it can be a very special year for our company. We already seen the impact of the changes we made in terms of sales strategy at the end of last year.
We already see this working. I look forward to hosting our next video call with the results for Q1. We should also expect to receive, by the end of April, a monthly update. In addition to putting out our press releases every quarter with the results and hosting this video conference call, we're also going to be circulating a monthly update, where we can't, of course, disclose any material information, but we hope will be plenty of information to allow you to keep up- to- date with what we're doing. I just stopped because I went to see if there was another question here. The two more questions. One of the questions was congratulations. No stupid questions by anybody. I presume this is a congratulation to all of you 40 people who spent the last one hour and 20 minutes listening to an update.
Thank you a lot. Stay safe, and I look forward to seeing you again in next few weeks. Thank you. Bye-bye.