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Latin America Focus

August 2014

Latin America Focus PUBLISHER STANLEY ALLIANCE INFO-TECH LIMITED TEL: +86-571-87240039 EMAIL: info@agropages.com CONTENTS Advertiser Index AgroChemEx

PUBLISHER

STANLEY ALLIANCE INFO-TECH LIMITED TEL: +86-571-87240039 EMAIL: info@agropages.com

CONTENTS

Advertiser Index

AgroChemEx / CCPIA

P36

Beijing PLM Biosciences Co., Ltd

P20

Bharat Group

P24

CAC Show / CCPIT

P31

Chemtec

P41

Corechem

P33

Croda

P3

Inside back cover

Dr. Knoell Consult Gmbh GREIF

P4

Hebei Veyong Bio-Chemical Co., Ltd.

P2

Indofil Industries Limited

P16

Jiangsu Fengshan Group Co., Ltd.

P12

Jiangsu Weunite Fine Chemical Co., Ltd.

P35

Johnson Matthey Catalysis & Chiral Technologies

Facing Content

Kline Group

P22

Marketsandmarkets

P15

Ningbo Generic Chemical Co., Ltd.

P27

ODS – Serviços em Agronegócio

P9

Rudong Zhongyi Chemical Co., Ltd.

P20

Shandong Kangqiao Bio-Technology Co., Ltd.

P33

Shandong Weifang Rainbow Chemical Co., Ltd. P27

Shanghai Profirst Co., Ltd.

P42

Siyang Rodenticide Factory

Back Cover

P42

Solvay

P6

Stockton Group

P38

Tide Group

P24

Yancheng Limin Chemical Co.,Ltd

Zhejiang Wynca Chemical Group Co., Ltd.

P25

Zhejiang Zhongshan Chemical Industry Group

P12

Market Insight

  • 5 Brief Overview of Latin America Agriculture in 2013

  • 7 Latin America: Granary of the World, a Land of Opportunity

    • 10 Multinationals Being Major Players in Latin American Market

    • 13 Agricultural Growth in Latin America: The Need for Innovative Agrochemical Products

    • 17 Latin America – the Main Driving Engine to Global GM Crops

    • 21 The Brazilian Crop Protection Market is Ripe for Growth

    • 23 Paraguayan Agrochemical Market Sales Boosted in 2013

    • 25 The Most Destructive Pests & Diseases Faced by Latin American Farmers Interviews

    • 28 “It’s all about stewardship” - Interview with César Lamonega

    • 30 CAC Exhibitions - Grow Together with the Chinese Pesticide Industry

    • 32 More Companies Registered Bio-pesticides in 2013 Viewpoints

    • 34 Brazilian Pesticide Market More Barriers for Access

    • 37 How to Cope with Volatile Economies in Latin America?

    • 39 Why Can We Get Competitive in the Paraguayan Agrochemical Market?

Disclaimer: If some advertisements and product profiles in this issue contain references to active ingredients still under patent protection in certain countries, such content

are deemed inapplicable to those countries.

Market Insight

Brief Overview of Latin America Agriculture in 2013

Market Insight Brief Overview of Latin America Agriculture in 2013 Author: Miguel Elizalde Dithurbide Miguel Elizalde

Author: Miguel Elizalde Dithurbide

Miguel Elizalde Dithurbide is a chemical engineer, with 16 years experience at Agrochemical & Seeds International Company, at the Manufacturing Technology Area. Since 2009, he worked as an independent agrochemical project`s consultant with focus on industrial improving operating practices through Six Sigma & LEAN Programs. He is also a freelance journalist of international magazines and a consultant for market research firms.

The total estimated arable land for South American countries and Mexico is about 136 million ha, where approximately 43.6% belongs to Brazil, 23.8% to Argentina and 17.9% to Mexico, it means more than 85% of arable land between

these 3 countries. Paraguay, in spite of having only 3.1%, is the 3rd largest soybean production from region. The climate boundaries* for the largest Latin America (L.A) crop’s countries, could be outlined as follows:

Brazil: Most of territory has a tropical climate (little or no significant frost) with

rains year round at the states of North and little or no rains during 2-3 months for the states of Center (where is located one of the largest crop’s producer state:

Mato Grosso). Also the North climate represents to the coastline of the Center region. In the South, there is a warm mid- latitude climate with occasional frost and rare snow and no distinct dry season. Two others largest crop’s states (Paraná & Río Grande do Sul) are located at the South.

Argentina: The largest crop producer’s states are located at the Center-East & Center-North where there is a warm middle latitude climate with more than occasional frost, rare snow and no distinct dry season. The NW states are smaller crop producers and are steppe or arid, with annual moisture losses that generally exceeds average annual precipitation. Southern states are steppe (arid) or desert areas, not useful for large crop productions other than small fruit crops (e.g Rio Negro valley and Andes mountainside valleys). Mexico: The Northern area is mostly steppe, arid or desert with annual moisture losses that generally exceeds average annual precipitation except a narrow strip of North East which is subtropical wet (e.g Matamoros state). The south half mainly has a tropical climate (little or

no significant frost) with little or no rains

during 2-3 month. Main largest crops planted in L.A region are summarized at the below table:

Crop / Season

Brazil

Argentina

Paraguay

Mexico

NOTES

MTns

MHa.

MTns

MHa.

MTns

MHa.

MTns

MHa.

 

Soybean

’13-‘14

 
  • 86.6 54.0

30.0

 

20.3

8.1

3.2

     

‘12-‘13

 
  • 81.5 49.3

27.7

 

20.0

 
  • 7.95 3.03

     
 

’13-‘14

 
  • 75.2 32.1

15.3

   
  • 2.83 0.64

  • 5.9 24.0*

 

7.9

 

Corn

’12-‘13

 
  • 81.5 32.1

15.8

   
  • 4.17 0.86

  • 6.1 7.4

22.1

   
 

’13-‘14

6.9

2.55

 

3.65

 
  • 9.2 3.5*

    • 1.39 0.63

 

0.65

 

Wheat

’12-‘13

5.5

2.2

 
  • 8.2 3.16

  • 0.96 0.59

 

3.3

0.59

 
 

’13-‘14

12.6

2.43

 
  • 4.7 1.26

       

Brazil: Rice

Others

                 

Arg.: Barley

’12-‘13

11.8

2.4

1.7

6.97

1.94

  • 5.2 Mex.: Sorghum

Sources: Ministries / Secretaries of Agriculture, Livestock & Fishing Note: Production volumes & Planted Area for ’13 – ’14 season are still under review.

 

Note *: Specific weather events, such as El Nino and/or La Nina can modify the above boundaries to held a sustained or repetitive situation along the time.

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August 2014

Latin America Focus

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Market Insight

Climatic highlights CY (calendar year) 2013: In South America the summer crop

production rose significantly across the

most of countries, giving the improved weather after abatement of La Niña and the transition to neutral/low effect ENSO (El Niño/Southern Oscillation) conditions. Soybean production in 2013-14 season seems to rise above 5% versus 2012- 13 season, mainly boosted by 10% higher planted area. However with yields slightly lower, corn volumes in 2013-14 season are estimated to be about 8% lower than 2012-13 season, mainly due to a combined effect of having 3% lower planted area and a shortage of rains during critical growing steps from plants. Wheat production in 2013-14 is expected

to increase by 25% compared to previous season with 15% increase in acreage also raising the yield almost by 10%.

Soybean production in 2013-14 is rising by almost 10% versus previous year, in spite of similar planted area; being

the main cause the severe flooding from

several key areas of Pampa Humeda (crop’s most fertile area at Center East of country) at the end of soybean cycle on previous 2012-13 season. As a consequence the yield this year is expected to increase by 8% versus previous season. Corn volumes in 2013-14 are estimated to be similar to previous season, although the planted area was about 3.3% lower. Main cause is the same weather effect

than the outlined above for soybean. Wheat production in 2013-14 is expected

to increase by 12% compared to previous season with similar acreage increase, delivering quite similar yields. Conditions for summer crops in Paraguay were similar to those in southern Brazil, with nearly good weather for soybean development, however the soybean production was slightly higher than previous year having a planted area almost 7% higher than previous season.

Corn had a significant reduction of

production, partially due to lower acreage

but having a shortage of rains during the

flowering step that reduced the yields by

10% comparing to previous season.

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Market Insight

Latin America: Granary of the World,

a Land of Opportunity

Market Insight Latin America: Granary of the World, a Land of Opportunity Author: Ricardo Stasinski Ricardo

Author: Ricardo Stasinski

Ricardo Stasinski is a founding partner of the company ODS – Serviços em Agronegócio. He acts as broker and trader in agricultural commodities futures markets. Ricardo is an agribusiness analyst, with regard to national and international markets for agricultural commodities.

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Latin America stands out globally with production potential in agriculture. It is a consolidated fact that the territory holds great worldwide importance as a food provider to the world. The expansion of the agricultural frontiers was mainly generated by rising global demand for food and biofuels, due to population growth and changing eating habits. This enabled many large-scale investments in agriculture as well as in technology that has boosted productivity. Nowadays, the main countries that stand out with large expanse of arable land are Brazil, Argentina, Paraguay, and Colombia. In these countries, especially Brazil and Paraguay, there are large agricultural areas to expand food production. Only Brazil has a total area of 835 million hectares, of which only 34% is used for agricultural and livestock use. For agricultural products stand in absolute numbers the grain production, such as soy,

corn, wheat, rice, cotton and coffee. But beside these, there is infinity of small crops, fruit

and vegetables that are developed in these countries. There is also great emphasis on the herds of cattle, poultry and pigs, mainly in Brazil and Argentina. The biggest problem for agriculture’s expansion in Latin America is the limitation of

infrastructure, mainly logistical barriers that reduce the efficiency of the flow ports, and also

the limited storage capacity. These factors reduce the competitiveness of export products due to high costs compared to large producers, like the USA.

However, even with great difficulties, the region attracts large investors in agriculture,

since Latin America is one of the few territories in the world with great potential, both

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Market Insight

territorial and cultural, for the expansion of agricultural frontiers in front of a growing demand for food.

Scenario in Brazil

Brazil is one of the biggest food producers in the world, and stands out by the steady increase in production season after

season. This is a result of the immense land area, along with the natural wealth, as the fertility of its lands, and the very favorable climate for agriculture, and in some regions, it is possible to make more than one crop per year. The main highlight is the production of grains such as

soybeans, corn, wheat, rice and coffee as well as fiber, which is

the case of cotton. Moreover, in meat production the country is an important producer of beef, pork and poultry. Therefore, soybean and corn end up having the largest number of area and production.

Table 1. Harvested area by crop in 2008 to 2014 in Brazil

Culture

 

Area

 

2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

Soybean

21.74

23.47

24.18

25.04

  • 27.74 30.11

 

Corn

14.17

12.99

13.81

15.18

 
  • 15.83 15.73

Wheat

2.43

2.15

2.17

1.90

  • 2.21 2.62

 

Rice

2.91

2.76

2.82

2.43

  • 2.40 2.40

 

Coffee

2.09

2.08

2.06

2.05

  • 2.02 1.93

 

Cotton

0.84

0.84

1.40

1.39

  • 0.89 1.10

 

Area:Million hectares

Source:CONAB

 

Agriculture is heavily dependent on foreign markets, because soy (which is largest agricultural commodity produced in the country), has 70% of its products being destined for export. For

coffee, approximately 67% of production is exported. Other crops such as cotton and corn, 38% and 27% respectively, are intended for export. For other cultures, the main destination is the internal consumption of the country. The importance of agriculture in Brazil

can be confirmed by what it represents in the country's exports,

34.3% of the total.

Market Insight territorial and cultural, for the expansion of agricultural frontiers in front of a growing

Figure 1. Production by culture in 2008 to 2014 in Brazil

In Brazil, good deal of soybean’s and corn’s production comes from the cultivation of GM crops, result of the increased

productivity that is provided, as well as ease of cultivation. Because of this, Brazil has the 2nd largest area of GM crops, 40 million hectares, and also the fastest growing in the world, according to ISAAA (International Service for the Acquisition of Agricultural Biotechnology) the country boasts 23% of the worldwide are, losing only to the U.S. in the cultivation of GM crops. Some of the facts that generate concern in the country is the incidence of plagues and diseases, that even under control has

increased significantly the production cost of Brazilian producers.

As Brazil has a high production potential, it is necessary to use technological packages of insecticides, pesticides and herbicides to continue emerging as a leading producer of the world.

Scenario in Argentina

Argentina is the second largest grain producer in Latin America.

In this country the main agricultural products are soybeans, corn,

wheat, barley and sunflower. Argentina has one of the most fertile

soils in the world, where it is grown about 35 million hectares.

On the other hand, even being such important grain producer,

Argentina did not expand its production areas as well as Brazil.

The grain production remained constant in recent years. This

country has its production concentrated in one region, at the mercy of bad weather, so oscillation occurs with the stable production area.

Table 2. Harvested area by crop in 2008 to 2014 in Argentina

Culture

 

Area

 

2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

Soybean

18.04

18.34

18.90

18.67

20.04

20.27

Corn

3.50

3.67

4.56

5.00

6.13

5.90

Barley

0.59

0.54

0.76

1.17

1.81

1.26

Wheat

4.73

3.56

4.58

4.63

3.16

3.65

Sunfiower

1.97

1.55

1.76

1.85

1.66

1.30

Area:Million hectares

Source:SIIA / Minagri

 

In 2013, Argentina produced 24.4 million hectares of GM crops, which corresponds to 14.4% of the total area cultivated with GM crops in the world. Corn production is largely for export, 65%, but in the case of soybeans, only 16% is allocated to the outside. Just like corn, wheat also has a large export volume, with Brazil as main destination.

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Market Insight

Market Insight Figure 2. Production by culture in 2008 to 2014 in Argentina In the least

Figure 2. Production by culture in 2008 to 2014 in Argentina

In the least years, Argentina has gone through economic and

political issues, which makes the country has high rates of inflation

and taxes on agricultural products. So, this ends up penalizing a lot of farmers who end up stocking up on agricultural production

to avoid the loss of purchasing power of their production. This practice happens especially in soybeans. In general, agriculture is

responsible for approximately 10% of the country's GDP.

Outlook

The expectation of rising in production, and expansion of the agricultural area in Latin America is strongly linked to the increased demand for agricultural products in Asian countries, which has gained much importance, especially for being the main imports and has the greatest potential for increased demand. Regarding the next season (2014/15), the outlook is for increased production in all countries, especially those that produce soybeans, corn and wheat. The price at the moment is favorable for producers to invest in the culture, and climate projections for the next harvest indicate that everything goes favorably for crops. In the case of soybeans is projected that Brazil and Argentina produce 91 and 54 million tons respectively. As for corn production is expected to 74 million tons for Brazil and 26 million tons for Argentina. Also in the 2014/15 season the occurrence of El Niño is expected, which historically represents good production rates in almost every producing regions of Latin America. However, as other producer countries also increase their production, if demand does not increase in the same proportion stocks will rise, and consequently prices worldwide will go down.

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Market Insight

Market Insight Multinationals Being Major Players in Latin American Market By Christina Xie Editor of AgroPages.com,

Multinationals Being Major Players in Latin American Market

By Christina Xie

Editor of AgroPages.com, Christina@agropages.com

As a most-fast growing crop protection market over recent years, Latin America is no doubt a very attractive market to global agrochemical companies. According to the statistics of famous agrochem consultancy Phillips McDougall, the crop protection market value of Latin America reached $14.547 billion in 2013, nearly 27% up year on year over the $11.467 billion of 2012. The crop protection market of Latin America has been growing at double- digit rate in average over the last 5 years, which is far higher than other regions of the world. The growth in this region in 2013 was primarily attributable to the developed overall economy resulting from the globally continued growing demand for soybean and maize, as well as the continued growing GM crops and the worldwide raise of crop prices.

Fig. 1 Companies’ sales in Latin America

Total market value was $11.467 billion in 2012

Market Insight Multinationals Being Major Players in Latin American Market By Christina Xie Editor of AgroPages.com,

Sales…

The fast growing market has attracted close attentions of large number of enterprises, where multinational companies, who have a sharp eye on the market and are very knowledgeable on marketing

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Latin America Focus

August 2014

strategy, would of course took first action to

capture the market. According to a rough calculation based on the sales indicators of the global agrochemical industry leaders in 2012, the crop protection product sales from the world top 7 agrochemical giants in Latin America accounted for above 90% of the total sales in the region, being respectively ranked as the following – Syngenta, Bayer CropScience, BASF, Dow AgroSciences, Monsanto, FMC and DuPont. The ranking simply shows that the market of Latin America has minimum space now left over for new players except for the relatively

bigger market which may be still exploitable in Brazil, which is the 1st largest market in Latin America and the second largest market in the world. According to the statistics of Brazilian agrochemical consultancy AllierBrasil, the top 8 agrochemical enterprises in the Brazil have taken up approximately 72% of the total market in 2012; the balance was shared by more than 100 companies including the generic agrochemical companies from China and India. 2013 saw excellent performance of the multinational companies. Syngenta achieved sales growth by 7% in the region reaching

$3.5 billion, attributable to the firm price of

soybean and the hot sales of seed treatment products as a result of increased demand for seed. The robust increased sales of Bayer enabled a 20% growth, resulting from its good performance in Brazil and Argentina particularly the sales of fungicides and insecticides. Although having been affected by unfavorable exchange rate, BASF managed to maintain a 3.7% growth in Latin America, mainly due to the increased insecticides sales. Similarly Dow also

achieved increased sales of insecticides. Monsanto’s GM crop penetration drove its increased sales of glyphosate in the region. For FMC, Latin America has been the largest market of growth of 2013, where the performance of soybean fungicides and insecticides in Brazil and the release of new product contributed greatly to the growth; furthermore its performance in Argentina and Mexico played a part in the growth. DuPont’s insecticide chlorantraniliprole and other insecticides enabled its growth in the region due to the strong demand in Brazil.

Fig. 2 Sales in Latin America region in 2012

Market Insight Multinationals Being Major Players in Latin American Market By Christina Xie Editor of AgroPages.com,

Expansion…

As far as we known, Brazil and Argentina are the most important markets

in Latin America region, therefore, it's

reasonable for multinational companies mainly concentrated their investments and expansions activities in these two countries. Based on the analysis of activities of the

companies in recent years, it is not hard to

find that seed and biotechnology are the most concerned fields of these companies.

At the end of 2012, Syngenta announced to invest $5 million to upgrade its research station located in Ceará, Brazil. The station mainly focused on research experiment covering soybean, maize, sugarcane and

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Market Insight

fruit such as watermelon and cantaloupe. The company also planned to raise investment to expand the capacity of its maize seed factory based in Brazil. In 2013, Bayer CropScience acquired Argentine seed company FN Semillas S.A., who specializes in the breeding, production and marketing of improved soybean seeds in Argentina. The acquisition has allowed for Bayer’s successful entry into the soybean market of Argentina; additionally Bayer has entered into an agreement with the Brazilian company wheat breeding company Biotrigo Genetica to have obtained the legal right for use of new wheat varieties of Biotrigo Genetica.

Monsanto built an R&D facility in Petrolina of Brazil last year in a purpose to speed up the research of crops including maize, soybean, cotton, sorghum and sugarcane of the country. Over the last

  • 10 years Monsanto has made over $1

billion investment in Brazil, mainly spent on research of seed, biological technology, genetic improvement, genetic and conventional breeding. The R&D center of Dow AgroSciences in Mato Grosso of Brazil has been brought on stream this year, being engaged mainly in development of hybrid maize which suits tropical zone, also engaged in research and development of soybean, gramineae and sorghum. Crop protection business related expansion activities taken place include the following:

August 2013, BASF launched a biological facility in Chile. At the end 2013, FMC announced a 3-year $20 million investment in a capacity extension to its pesticide plant in Brazil which will end up in an annual output of 250 million liters of pesticide. 2013-2014, another active company Sumitomo Chemical has established a branch in Argentina for expansion of herbicide business as well as the branch Summit Agro Chile SpA in Chile to develop the marketing of its pesticide and plant growth regulator.

Product…

Over recent 2 years the earworm (Helicoverpa armigera) in Latin America especially in Brazil has been a trouble to farmers and administrations, and recently

same problem is reported to occur in Argentina and Paraguay as well. In the planting season 2012/2013, earworm already caused damages to the main crops of Brazil, resulting in nearly a loss of $5 billion although farmers had planted worm- resistant GM varieties and also applied conventional insecticides. During the times of plague of earworm in Brazil, multinational companies seized the opportunity to promote their respective pest control products resulting in hot sales of insecticides which contributed considerably to the growth of several transnational companies in 2013, as mentioned aforesaid. The pesticides

introduced for earworm in 2013-2014 as per the following:

Apart from the approved insecticides for earworm control as stated above, the companies also released various products in the 2013/2014 planting season. Syngenta registered in Argentina its seed treatment insecticide FORTENZA™ (cyantraniliprole) for application to soybean, maize and

sunflower; and released in Brazil its fungicide ELATUS™ (benzovindiflupyr +

azoxystrobin), which is said to be the most

effective product against Asian Rust since 10 years. In Brazil, Bayer CropScience released the fungicide Serenade® with active ingredients being Bacillus subtilis strain QST713 for application to fruit and vegetable.

In 2013, the 2 fungicides of BASF against Asian Rust were approved by Brazilian government, being respectively the

Orkestra™ (fluxapyroxad + pyraclostrobin) and Xemium® (fluxapyroxad). In 2014

BASF released the insecticide Fastac ®

Duo (alpha-cypermethrin + acetamiprid) for the primary pest control in soybean field.

DuPont released the fungicide Aproach®

Prima (picoxystrobin + cyproconazole) for

soybean rust control and herbicide Accent®

(nicosulfuron) for maize field weed control.

Accent® is the only nicosulfuron-based post-emergent herbicide using NicoDry® technology. FMC also released in Brazil the insecticide Mustang (zeta-cypermethrin) for soybean and maize.

In March 2014, Bayer CropScience

acquired the Argentine seed treatment

Pesticides introduced for earworm control in Latin America

 

solution provider Biagro, which enhanced its

Company

Product

Active ingredient

Applied crop

competiveness in biological seed treatment. 2013, BASF announced its EUR

AgBiTech

HzNPV CCAB

Nucleopolyhedrovirus

-

  • 50 million investment in an expansion of

Andermatt Biocontrol

Diplomata

Nucleopolyhedrovirus

-

the crop protection production capacity

Arysta

Atabron 50 CE

Chlorfluazuron

cotton, soybean

within the Guaratinguetá chemical plant,

BASF

Pirate®

Chlorfenapyr

oilseeds

which mainly includes an extension to the

Certis

Gemstar®

Nucleopolyhedrovirus

cotton, soybean

boscalid production capacity in support of establishment of its latest Xemium®

Dow AgroSciences

Tracer

Spinosad

cotton, soybean

(fluxapyroxad) formulation plant as well as

Dow AgroSciences

Intrepid

Methoxyfenozide

cotton

the Heat® (saflufenacil) formulation plant; in

DuPont

Premio®

Chlorantraniliprole

maize, soybean

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Latin America Focus

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Market Insight

Agricultural Growth in Latin America:

The Need for Innovative Agrochemical Products

Latin America, the emerging agricultural powerhouse, is growing at a rapid pace above the global growth average. Growth

in this region is significantly contributed by the growth in the

agricultural sector of Brazil and Argentina.

Latin American agrochemical market result ($ million)

Category

2013

2012

Change%

2019 (est.)

Herbicides

5,524.2

5,251.2

+5.2

8,375.8

Insecticides

2,218.8

2,129.4

+4.2

2,834.6

Fungicides

2,071.4

1,967.1

+5.3

2,916.1

Seed

       

treatment

524.0

465.8

+12.5

1,063.2

Source: MarketsandMarkets Analysis

 

The Latin American market is led by Brazil in terms of pesticide consumption and utilization. The Latin American herbicides market was valued at $5,524.2 million in 2013 and is projected to touch a value of $8,375.8 million by 2019, at a CAGR of 7.3% from 2014 to 2019. Argentina saw a consumption 123.4 thousand tons of herbicides in 2013 and is expected to reach 166.8 thousand tons by 2019. The non-selective herbicides segment is expected to grow at a CAGR of 8.0% from 2014 to 2019 and is likely to reach a value of $6,218.2 million by 2019. The cereals & grains application was the largest segment, valued at $2,107.2 million in 2013.

Latin America, Herbicides Market Size

Market Insight Agricultural Growth in Latin America: The Need for Innovative Agrochemical Products Latin America, the

Brazil was the largest fungicide market in Latin America and its market size in terms of value was $814.5 million in 2013 and is projected to reach a value of $1,208.7 million by 2019, growing at a CAGR of 6.8%. The triazoles segment within the Latin American fungicides market is the largest in terms of value, and is projected

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to reach a value of $350.1 million by 2019. In terms of application, the oilseeds & pulses segment is projected to grow at the highest CAGR of 6.4 % from 2014 to 2019. The Brazilian insecticides market was valued at $981.0 million

in 2013 and is projected to reach $1,293.9 million by 2019. The

demand for soybean has increased in the last decade in Argentina,

which is projected to help the insecticides market to grow at a CAGR of 4.1% from 2014 to 2019. The organic phosphorus

compounds segment is the fastest growing segment in the Latin

American insecticides market. Growing at a CAGR of 4.8% from

2014 to 2019, it is expected to be worth $753.8 million by 2019.

The fruits & vegetables application is projected to have a market

share of 23.6% by 2019 in the Latin American insecticides market.

Latin America, Fungicides Market Size

Market Insight Agricultural Growth in Latin America: The Need for Innovative Agrochemical Products Latin America, the

Latin America, Insecticides Market Size

Market Insight Agricultural Growth in Latin America: The Need for Innovative Agrochemical Products Latin America, the

The Latin American seed treatment market was valued at $524.0million in 2013 and is expected to reach $1,063.2million by 2019, growing at a CAGR of 12.5% from 2014 to 2019. The seed treatment segment is the largest within the Insecticides market, and was valued at $271.4 million in 2013. Brazil is the second-

August 2014

Latin America Focus

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Market Insight

largest user of GM seed in the world after U.S. Brazil holds about 15% of the global seed treatment market and 80% of the Latin American seed treatment market.

Latin America, Seed Treatment Market Size

Market Insight largest user of GM seed in the world after U.S. Brazil holds about 15%

Today, there is a massive volume of research being carried out, aiming at developing agricultural technologies across the globe. Farmers have embraced new technologies because it makes them

increasing production costs accompanied with much environmental impact on their farmlands. If Latin American nations have to come

up facing all the odds, it should implement necessary steps to mend the plight of their farmers and farmlands for a better future. The statutory bodies must formulate policies that help the farmers to gain better returns for their products, especially for the cash crops produced in this region. Better crop management practices with the infusion of sustainable organic farming could lead the way for an everlasting production of food to feed the masses. The Latin American agrochemicals market is growing at the fast pace. Due to the vast area undertaken for cultivation, greater adoption of agrochemicals has been observed in Latin America. Companies and manufacturers around the world must develop a long term strategy of sustained growth of the agrochemicals. This strategy includes phasing out of the old molecules from the market which have posed a threat to the environment. Research and development activities have been undertaken in order to develop molecules which have comparatively lesser environmental impact. Taking a cue from the European market, companies in Latin America should prepare to face saturation and therefore should have a non- myopic vision and start investing in sustainable solutions. The coffee rust fungus, also known as ‘la roya’ is creating havoc among coffee plantation owners in the Latin American region. According to International Coffee Organization the fungus has damaged crops worth $500 million which has resulted in loss of 374,000 jobs in Latin America. The crop protection

Market Insight largest user of GM seed in the world after U.S. Brazil holds about 15%

more efficient in protecting or increasing yields and reduces their

reliance on the harmful chemicals. Latin America contributes 11% to the current value of

global food production and had a share of 13% in the global agricultural trade in 2013. Brazil produces a wide range of crops but the soybean crop has gained tremendous importance in the last couple of years and now more than half of the global soybean production comes from the Latin American nations of Brazil, Argentina, Paraguay, Uruguay and Bolivia.

Currently, Latin America is the world's

fastest-growing agrochemical market owing to

Brazil's strengthening agribusiness and economic

improvements in Argentina. Latin America has immense potential to help in meeting the growing global demand for food, feed, and fuel in a sustainable, productive way. Even leaders in the World Economic Forum are optimistic about the contribution of South America related to the global food supply. According to Global Harvest Initiative (a private-sector voice for productivity growth throughout the agricultural value chain to sustainably meet the demands of a growing world), the food demand could be met within the region as well as passed on to the global agricultural markets if the current total factor productivity of 2.67% is maintained every year.

companies have a significant opportunity to

introduce solutions that can counter this fungal infection for which famers are ready to pay premium

prices in order to protect coffee plantations. The dry climate in Brazil and Argentina is increasing insect

pressure on crops. This has created significant demand for

insecticides in these countries. The increase in glyphosate

resistant weeds is creating significant demand for herbicides in

Challenges the farmers face and what should agrochemical companies do?

The Latin American farmers have been facing the problem of

the Latin American region. Increasing intensity of soybean rust infection is creating massive demand for advanced fungicides in the Latin American region. The increasing pressure on farmers to optimize crop yield for export grade agricultural products is increasing demand for

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Latin America Focus

August 2014

www.agropages.com

Market Insight

advanced crop protection chemicals in Latin American region. Soybean rust as common fungal infection has increased demand for fungicides in Latin America where soybean crops occupy maximum share in cultivation.

The high intensity of conventional herbicide resistant pigweeds in Brazil is creating concerns related to ecological balance in this country. Herbicide manufacturers need to explore advanced varieties of herbicides to tackle these ever evolving weeds.

The Brazilian farmers are embracing genetically modified crops due

to price sensitivity of various agricultural inputs such as agrochemicals and water which are required in fewer amounts for cultivating these

crops. As compared to the North American region where governments shower various incentives for agricultural community, the Latin American governments lack the required resources for providing heavy

incentives for the agricultural sectors. Hence farmers in this region

have started using genetically modified crops which require lesser

agricultural inputs. Global warming and green-house emissions have resulted in an

increase in the intensity of infestation of fungus and insects on crops. This has consequently created substantial demand for crop protection chemicals in this region. The increasing demand for bio-fuel, which requires agricultural inputs such as corn and sugarcane, is creating

substantial demand for advanced crops to suffice the high production

requirements of bio-fuel. This has increased the use of crop protection

chemicals for the purpose of optimizing yield. Increasing awareness related to crop protection and utilization of modern agricultural practices warrant a substantial utilization of agrochemicals in the Latin American region. Taking into consideration the modern motto of sustainable agriculture, the agrochemical manufacturers have to develop products that have a minimum environmental impact. If they are able to strike a balance between effectiveness and sustainability, then the Latin American market can provide maximum return on investment to agrochemicals manufacturers.

About MarketsandMarkets

MarketsandMarkets is a global market research and consulting company based in the US. It publishes strategically analyzed market research reports and serves as a business intelligence partner to Fortune 500 companies across the world. MarketsandMarkets also provides multi-client reports, company profiles, databases, and custom research services. For further details please visit www. marketsandmarkets.com

Market Insight advanced crop protection chemicals in Latin American region. Soybean rust as common fungal infection

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August 2014 Latin America Focus 15
August 2014
Latin America Focus
15

Market Insight

LATIN AMERICA – the Main Driving Engine to Global GM Crops

Market Insight LATIN AMERICA – the Main Driving Engine to Global GM Crops By Christina Xie

By Christina Xie

Editor of AgroPages.com Christina@agropages.com

According to the statistics of ISAAA, a total of 27 countries have planted GM crops in 2013 amounting to a total area of 175 million hectares, which is a new historic record. There are 11 countries in Latin America having planted GM crops accounting for 41% of the world total number of countries; the total planted area of the countries in Latin America reaches 71.2 million hectares, accounting for 41% of the world total planted area of GM crops. The 11 countries are respectively Brazil, Argentina, Paraguay, Uruguay, Bolivia, Mexico, Colombia, Chile, Honduras, Cuba and Costa Rica, where main GM crops include maize, soybean, cotton and canola. In terms of planted area of GM crops, the top 5 countries in Latin America are respectively Brazil, Argentina, Paraguay, Uruguay and Bolivia. The total planted area of the top 5 countries has reached 70.8 million hectares accounting for 99.4% of the total planted area of GM crops in Latin America, where Brazil and Argentina appear to be far ahead with their respective planted area of 40.3 million hectares and 24.4 million hectares ranking No.2 and No.3 globally following to the No.1 planted area of 70.1

million hectares in the US. It has been the first time for Brazil

to break through 40 million hectares. The growth of Brazil has been a driving force to the global growth for 5 consecutive years with its increased planted area exceeding all other countries. Additionally, Brazil achieved a breakthrough in the plantation of the 2.20 million hectare soybean of herbicide tolerant (HT) and insect resistance (IR) stacked traits while its locally cultivated anti-virus GM black crop to be commercialized soon.

Market Insight LATIN AMERICA – the Main Driving Engine to Global GM Crops By Christina Xie

Outbreak of earworm boosted planting area of GM cotton in Brazil

According to the statistics of the Brazilian consulting company Celeres, soybean is of the largest planted area of GM crops in Brazil in the 2013/2014 planting season, which is a slight increase by 1.5% over the 2012/2013 season, having reached 27.4 million hectares. The planted area of GM soybean in Brazil accounts for as much as 91.8% of the total planted area of soybean; the planted area of GM maize remains more or less the same as the 2012/2013 season, being 12.5 million hectares accounting for 81.6% of the total planted area of maize in Brazil; the planted area of GM cotton has grown fastest in the 2013/2014 season, being 17.9% up year on year and having reached 710,000 hectares accounting for 65% of the total

planted area of cotton in Brazil.

Top 5 countries planting GM crop in Latin America (million ha)

 
   

Country

2013

2012

Change%

 

GM crops planted in Brazil (million ha)

 

Brazil

 
  • 40.3 +10.1

  • 36.6 Crop

 

2013/14

2012/13

Change%

Argentina

 
  • 24.4 +2.1

  • 23.9 Soybean

   
  • 27.4 +1.5

27.0

 
       

Paraguay

3.6

3.4

+5.9

Maize

 
  • 12.5 +0.2

12.48

 

Uruguay

1.5

1.4

+7.1

Cotton

     

Bolivia

1.0

1.0

-

  • 0.71 +17.9

0.60

 

Source: ISAAA

Source: Celeres

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August 2014

Latin America Focus

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Market Insight

The analysis of Celeres reveals that because soybean sells at a much higher price than maize therefore farmers would of course

prefer to plant more soybeans when planting area remains within certain extent thus resulting in the higher growth rate of soybean than

that of maize. Moreover the main reason for the significant increase

of planted area of GM cotton lies on the outbreak of earworm over

the last 2 years. Although at present GM cotton is not proved to be resistant to all pests, yet farmer’s enthusiasm is not affected.

In addition the short supply of cotton in Brazil and the high price of cotton in international market are also important reasons for farmers to increase the planted area. The planted GM crop variety in Brazil has currently 3 kinds of traits -- HT, IR, HT and IR stacked. In the 2013/2014 planting season, GM crops of HT is of the largest planted area which is approximately 63.7% of the total planted GM crop area amounting to 25.9 million hectares, being 0.7% down year on year, mainly due to the decreased market share as captured by the commercialization of soybean of HT and IR stacked traits, insect-resistant cotton and composite property cotton. GM crops of HT and IR stacked traits are of the 2nd largest planted area amounting to 8.2 million hectares, being 45.8% up year accounting for 20.2% of the total planted GM crop area. This kind of

GM crop variety is liked by farmers for its several benefits brought to farmers such as easy handing, reduced filed working hour and

decreased work load. In Brazil the GM crop variety only with IR trait is now limited to maize and cotton, the planted area of which increased by 10.5% up to the 6.5 million hectares in the 2013/2014 planting season accounting for approximately 16.1% of the total planted area of GM crops. Similarly the market of GM crop variety only with IR trait is also squeezed by the increasingly growing GM crops with stacked traits. Nevertheless for Brazilian farmers, GM crop variety only with IR trait still remains to be an important variety, particularly the insect-resistant cotton, because there is few commercialized cotton with stacked traits. According to Celeres, during the 17-year GM crop planting period (1996-2013), an economic value of $24.8 billion has been generated, 55% of which is originated from GM maize. Although planting of GM maize started only from 2009, which however has rapidly led the GM

crop market growth of Latin America. The GM soybean which was started in the 90’s last century contributed 41% market value; the balance of the 4% is generated by GM cotton. Celeres predicts that in the 10 years ahead starting from 2013/2014 planting season up to 2022/2023, GM crops in Brazil will generate a market value of $90.8 billion. The takeoff of GM soybean is expected to cause changes to the GM market structure in the future, when 56% of market value will come from GM soybean, 38% from GM maize and 6% from GM cotton. Brazil has maintained stable growth of GM crops over the last

5 years, especially the fast growth of soybean and maize. There is no comparability between conventional and GM technology in the present planting season except cotton for which conventional method is still attractive to farmers. GM applications for the planting season coming up next will continue to grow while conventional method will become a niche business. However due to the increasing of demand from Europe and Asia for non-GM crops, the conventional produce will be of high value.

Argentina’s 3 major crops being mostly GM varieties

Like Brazil, Argentina’s planted GM crops are primarily soybean, maize and cotton. According to the statistics of ArgenBio, Argentina’s

GM soybean is of the largest planted area, 7.22% up year on year over that of the 2012/2013 planting season having reached 20.5 million hectares. The planted area of GM maize dropped by 14.6%, being 3.74 million hectares while the planted area of GM cotton

increased significantly by 28% having reached 550,000 hectares.

Almost all soybean and maize planted in Argentina are GM varieties; and planted area of GM cotton accounts for as high as 95% of the total planted area of cotton.

GM crops planted in Argentina (million ha)

Crop

2013/14

2012/13

Change%

Soybean

20.5

19.12

+7.22

Maize

3.74

 
  • 4.38 -14.61

cotton

0.55

 
  • 0.43 +27.91

Source: ArgenBio

The statistics of Argentine biological institution ArgenBio reveals an

economic value of roughly $70 billion being generated by GM crops in

Argentina during the 15 year-period starting from 1996 when the first

GM crop was approved.

Multinationals promote new varieties as China gave green light to some GM soybeans

According to ISAAA, a total of 13 GM crop varieties were approved in Latin America in 2013. Mexico has the largest number of approved varieties -- 6 varieties including maize, soybean and canola; Argentina and Paraguay each has 3 varieties approved; Brazil has only 1 approved variety which is the Herculex XTRA™ Maize jointly developed by Dow AgroSciences and DuPont Pioneer. Back in 2010, Brazil approved planting of Monsanto’s Intacta RR2 PRO™ GM soybean. According to Monsanto, this kind of GM soybean seed is a customized especially for farmers of South

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Latin America Focus

August 2014

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Market Insight

New GM crop approvals in Latin America in 2013

 

Country/Product* (Event name)

GM trait

Approved use

Company

 

Mexico

Maize 1 (DAS40278 x NK603)

Glyphosate HT, 2,4-

food use

Dow

D HT

AgroSciences

Maize 1 (MON89034 x TC1507 x

Glufosinate & Glyphosate & 2, 4-D

 

Dow

MON88017 x 59122 x DAS40278)

HT, Coleopteran & Lepidopteran IR

food use

AgroSciences

 

Glufosinate HT,

   

Maize 1 (MON89034 x TC1507 x

Glyphosate HT,

food use

Dow

NK603 x DAS40278)

Lepidopteran IR,

AgroSciences

2,4-D HT

TruFlex™ Roundup Ready™ Canola

     

(MON88302)

Glyphosate HT

food use

Monsanto

Soybean 1 (MON87708 x MON89788)

Glyphosate HT,

   

Dicamba HT

food use

Monsanto

Agrisure® Duracade™ Maize (5307)

Multiple IR, MM

food use

Syngenta

 

Argentina

   

food, feed use

 

Cultivance Soybean (CV127)

Sulfonylurea HT

& cultivation

BASF

     

Dow

Maize 1 (TC1507 x MON810)

Glufosinate HT,

food, feed use

AgroSciences/

Lepidopteran IR

& cultivation

DuPont (Pioneer

 

Hi-Bred)

 

Glufosinate HT,

   

Optimum™ Intrasect Maize (TC1507 x MON810 x NK603)

Glyphosate HT,

Lepidopteran IR

food, feed use & cultivation

DuPont (Pioneer

Hi-Bred)

 

Paraguay

Roundup Ready™ Cotton (MON1445)

Glyphosate HT, AR

food, feed use & cultivation

Monsanto

Roundup Ready™ Bollgard™ Cotton (MON531 x MON1445)

Glyphosate HT, Lepidopteran IR, AR

food, feed use & cultivation

Monsanto

Intacta™ Roundup Ready™ 2 Pro

Glyphosate HT,

food use &

 

Soybean (MON87701 x MON89788)

Lepidopteran IR

cultivation

Monsanto

 

Brazil

     

Dow

Herculex XTRA™ Maize (TC1507 x

59122)

Glufosinate HT,

Coleopteran IR,

Lepidopteran IR

food, feed use & cultivation

AgroSciences /

DuPont (Pioneer

Hi-Bred)

Note: * if the product has no trade name, only shows the crop type; 1 trade name is not available; HT= herbicide tolerance; IR= insect resistance; AR= Antibiotic resistance; MM= Mannose metabolism. Source: ISAAA

America for increase of yield, which has 3 advantages: yield increase, glyphosate resistance and soybean pest control. In view of the present soybean planting area of Brazil and the use of this seed, Brazil is expected to become the world largest soybean exporting country surpassing the US, bearing in mind that this kind of seed is put into mass plantation only from the latter part

of 2013. China is Brazil’s largest soybean destination country, taking 70% of Brazil’s

soybean. In June 2013 Chinese government

approved import of this kind of soybean,

followed by Monsanto’s official release of

its Intacta RR2 PRO; Monsanto estimated

that 8% of the soybean seed used in the 2013/2014 planting season in Brazil would be the Intacta.

In 2014, Dow AgroSciences announced successful development of a GM insect- resistant soybean variety customized for

Latin America, which is not only resistant to various herbicides but also resistant to the

commonly existing leaf eating worms. The new variety has been submitted to Brazilian

regulatory authorities, being planned to be

put into commercial sales in 2016. Once being approved, this soybean variety will

become a competition to the Intacta RR2

Pro of Monsanto. Furthermore, the Brazilian research institution Embrapa is currently developing a drought-resistant GM soybean crop, which

will bring benefit to the growers in the dry

southern part of Brazil.

In 2014, Argentina’s agricultural

biotechnology committee approved the GM soybean DAS-444O6-6 of Dow AgroSciences, which is resistant to 3 kinds

of herbicides – glyphosate, glufosinate and

2,4-D.

In early 2013 Paraguay approved the commercialization of the Intacta RR2 Pro of

Monsanto; recently Paraguay approved the

commercialization of the GM Maize NK603

of Monsanto. To this end, Paraguay has totally approved 5 GM maize varieties. What is different from countries like

Brazil, Argentina and Paraguay, who are in

favor of GM crops, there are countries in

Latin America who are firmly against GM

crops. At the end of 2012, Bolivia released

a regulation to ban plantation of GM crops. Just 1 month later, a policy of Peru which

bans the plantation or use of GM crops has

officially come into effect after the 10-year

suspension of plantation of GM crops.

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August 2014

Latin America Focus

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Market Insight

THE BRAZILIAN CROP PROTECTION MARKET IS RIPE FOR GROWTH
THE BRAZILIAN CROP PROTECTION
MARKET IS RIPE FOR GROWTH

The growing global population, increasing need to improve crop yields, and increasing demand for biologically- based new products are expected to drive the demand for crop protection chemicals in the future. Brazil continues its role as a primary driver of global growth in the crop protection market. Being the seventh largest economy in the world and the largest among those in the Southern hemisphere, Brazil is also one of the fastest growing economies, as well as, most importantly, the largest crop protection country market. With a 14% increase to nearly $10 billion in manufacturer level sales, based on interviews gathered and analyzed through November 2013 for the full previous year, 2012 was an excellent year for the crop protection industry across all product categories. For 2013, the estimated sales jumped by 18% to some $11.5 billion. This remarkable growth was driven by three main drivers:

Primarily, export demand for corn and soybeans generated steady increases in acreage of these crops and a corresponding increase in use of crop protection products. Although the export growth may be slowing somewhat, it is far from mature as China rebounded as a customer of Brazilian soybeans and corn. Secondly, increasing domestic food consumption by a growing population

increases produce crops and the associated inputs.

Lastly, the adoption of high value seed technology and the related seed protectant products purchased as insurance policies. Crop protection manufacturers have long focused on Brazil as a potential growth target. Syngenta is the long- term leading company with an estimated 20% market share. Bayer and BASF are strong and consistent second and third players, and fast-growing FMC jumped

five spots from the ninth position to

the fourth position in the last 10 years, passing companies such as Monsanto, DuPont, and Dow AgroSciences in the process due to the historical strength of its sugar cane and strong performing soybean positions in recent times. While these major crop protection producers are holding onto their sizable market share in the face of generic competition from smaller companies, this may change as the speed of registering new products appears to be increasing due to pressure from growers and manufacturers to increase

the efficiency of the product registration

infrastructure. Nowadays, approval for a chemical pesticide can take up

to five years, but a biological may be

registered within 60 days as registration of biological products is a government’s priority. Additionally, those companies

that do not have share in the four major crop markets in Brazil are investing in products for these segments now.

Brazil Crop Protection Company Market Shares

Market Insight THE BRAZILIAN CROP PROTECTION MARKET IS RIPE FOR GROWTH The growing global population, increasing

Among the leading indicators of crop protection market changes was growth in herbicides sales, driven by increases in the planted areas of winter corn and soybeans, which increased by over 14% in 2012. Additionally, glyphosate resistance in weeds continues to be an industry concern, forcing an increase in selective herbicide sales. Moreover, the increase in insect pests, such as H. armigera , which is a new pest for Brazil, aided the heightened use of insecticides, which grew over 21% and was the second leading category, representing over 30% of the total market. Notably, seed treatments also reaped double- digit growth despite its minor presence in the Brazilian crop protection market.

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August 2014

Latin America Focus

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21

Market Insight

Market Share by Product Type, 2013

(preliminary findings)

Market Insight Market Share by Product Type, 2013 (preliminary findings) Some of the leading trends in

Some of the leading trends in recent years include integrated marketing by companies that sell both seeds and crop protection products to offer one- stop shopping platform, consolidation of distribution, and increasing market power of mega growers among others. For new crop protection companies entering the market, distribution is

significant in a country the size of

Brazil, which has such large regional variations in crops, climate, and culture. Other trends include growth in biological products based on favorable

registration regulations and government encouraging organic farming. Bayer and BASF have acquired leading companies

in the biological arena, and others have negotiated technology agreements to stay competitive with biopesticide technology. Furthermore, farm economics are favorable for growers now. Despite higher input costs for seeds and chemicals, commodity prices have remained high in Brazil. As a result, farming is seeing record setting

profitability in this region and is not

showing signs of slowing down in the near future. Growing pest issues will also play a role in developing this potent market as weed and pest resistance is emerging as a key issue in Brazil. Glyphosate weed resistance is growing and Bacillus thuringiensis (Bt) insect resistance is becoming prevalent. Global population growth, biologically-

based new products, continued seed and/or chemical integration, and the emergence of plant health as a distinct market segment will be future drivers in the Brazilian market. Moreover, external factors that will shape Brazil’s agribusiness sector include sustainability of crop production, water management, climate change, logistics, and governmental registration time lag.

About Kline Group

Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www. KlineGroup.com.

22 Latin America Focus August 2014 www.agropages.com
22
Latin America Focus
August 2014
www.agropages.com

Market Insight

Paraguayan Agrochemical Market Sales Boosted in 2013

The total sale of pesticide in Paraguay in 2013 was

 

$299.33 million; 41% corresponds to herbicides, 36%

 

Paraguayan agrochemical sales per crop ($ million)

 

to insecticides and 23% for fungicides. Market increase in Paraguay is related to increasing new areas being

Crop

Sales of 2013

Sales of 2012

Change%

developed. Beef and rice production are the activities

soybean

 

367.63

 
  • 294.1 +20%

responsible for increasing new productive regions.

Corn

 

34.97

 
  • 29.72 +15%

Regional economy also helps to be attractive for foreign

Sunflower

 

4.09

2.86

+30%

capital investments.

Wheat

 

39.33

32.25

+18%

Paraguayan pesticides market result ($ million)

Rapeseed

 

5.31

5.04

+5%

Category

Sales of 2013

Sales of 2012

Change%

Total

 

451.36

369.98

+22%

Herbicides

 
  • 121.94 +46.01%

83.51

 

Source: El Tejar Paraguay SRL

 

Insecticides

 
  • 107.44 +13.42%

94.72

   

Fungicides

69.94

60.42

+15.75%

   

Source: Import Custom House Information

 

Paraguayan agrochemical import volume (Kg)

 
       
 

Products

2013

 

2012

Adherents 147,050 347,307
 

Adherents

147,050

 

347,307

Adjuvants

1,216,266

 

1,544,802

Correctors

210,087,600

 

124,422,000

Soil Improvers

4,409,980

 

718,528

Fertilizer

809,657,963

 

653,907,377

Foliar Fertilizer

6,138,855

 

5,021,762

Formulated Fertilizer

2,213,000

 

336,000

Mineral Mixed Fertilizer

12,326,000

 

1,056,000

Mineral Simple Fertilizer

1,354,500

 

234,000

Fungicides

3,254,212

 

3,079,798

Herbicides

32,298,605

 

22,291,677

Inoculants

359,492

 

254,179

Insecticides

8,146,327

 

8,520,366

Adjuvants Insecticides

133,363

 

146,391

Acaricide Insecticides

337,263

 

206,834

Seed Insecticides

78,809

 

226,258

Raw material for fertilizers

143,238,799

 

18,800,113

Substrates

223,790

 

293,151

Others

-

 

450,383

www.agropages.com

 

August 2014

Latin America Focus

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Market Insight

According to sources from the Senave, the reduction of products revenues responds directly to a hard drought occurred in 2012 and large volumes of products could not be sold, at the same time, the price of the dollar was low during that year which increased income products. Paraguay agrochemicals and fertilizers business achieved an increase of 13% reaching $3,043 million in 2013. It should be noted that the entry of fertilizers and plant protection products has three legal ways, which are through the processing industries, the formulator and multinational companies which import the product totally prepared.

Registration

Paraguay granted 400 registrations of crop protection products in 2013, some of which were generic while others belonged to different companies, according to the specialist Cristian Marecos from the Senave of Paraguay. Marecos highlighted that this was a particularly busy year because of all the work derived from the new implementation of the chemical equivalence – a procedure that must be observed for each product since the late 2012. In relation to this, he said that

Argentina’s development in the market is better, since the measure was introduced much earlier than in Paraguay. Lastly, the technician said that in 2014 not only will new patents be granted, but also those approved in the past will be validated. Likewise, Marecos stated that in the market there is a great demand for crop protection products since the region presents tropical weather, which allows for the existence of all kinds of fungi and insects.

About Overseas Agro

OVERSEAS AGRO, born in the year 2010, inspired by Agr. Eng. Fidel Macul Junior. It dedicates to service to requirements of customers related to the Agrochemical´s market in Paraguay. Offers quickness, professionalism and consistency in their operations. Focalized in the complete offer of local Agrochemicals from multinational industries via local distributor, up to finally provide to farmers producing commodities in Paraguay. The company covers the complete service of regular procedures for REGISTRATION MANAGEMENT, up to IMPORT of agricultural inputs. It has as warranty, the remarkable quality of products of global companies most important of China and India.

24 Latin America Focus August 2014
24
Latin America Focus
August 2014
Market Insight According to sources from the Senave, the reduction of products revenues responds directly to

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Market Insight

The Most Destructive Pests & Diseases Faced by Latin American Farmers

According to the report published by CropLife Latin America, in Latin America and the Caribbean regions, agriculture generates 28% of employment. Average agricultural exports from Latin America represent 23% of the world total. In 2013, the farmers contributed 3% of the gross domestic product (GDP) in Latin America. Today, farmers lose between 20% and 40% of their crops by the actions of pests, weeds and diseases. Pesticides help avoid the proliferation of pests, weeds and diseases affecting millions of hectares of crops. Another fact we have to know is that $270 million worth of investment in R&D is behind every pesticide’s development, dozens of scientist’s multidisciplinary teams are part of the research behind

each molecule. And the pesticide industry is one of the most regulated in the world, 9.5 years is the average time of R&D of each pesticide, a package of 130 studies needs to be submitted before the national authorities to obtain sales and marketing permission. The science behind a pesticide, guarantees that when the pesticides are used under the instructions on the label, they are safe for human health and the environment. By 2050 we will be a population of 9,500 million people, pesticides can support farmers to face the challenge of feeding a growing population. Below are a few of the pests that farmers have had to face during

2013.

  • 1. Coffee Rust (Hemileia vastratrix)

Market Insight The Most Destructive Pests & Diseases Faced by Latin American Farmers According to the

Type: Fungus Crop affected: Coffee Coffee Rust is a disease which is caused by the class of fungus named uredinales, which specializes in parasite living cells. The climate change has increased the impact and the attack expanded to areas of higher altitude. The loss is immediate

for the fruits that fall or do not mature because of the defoliation of plants.

Losses:

Market Insight The Most Destructive Pests & Diseases Faced by Latin American Farmers According to the

In Latin America, from 2012, 30% of crop losses have occurred. In Central America, between 2012/13, losses have occurred to the value of $243 million.

www.agropages.com August 2014 Latin America Focus 25
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August 2014
Latin America Focus
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Market Insight

  • 2. Earworm (Helicoverpa armigera)

Type: Pest Crops affected: Soybeans, cotton and corn

The Helicoverpa Armiguera is a polyphagous and cosmopolitan insect which has a high mobility and high reproductive rate. They feed on leaves,

stems, buds, inflorescences, fruits and

beans.

Losses:

Market Insight 2. Earworm ( Helicoverpa armigera ) Type: Pest Crops affected: Soybeans, cotton and corn

In Brazil, during the 2013/2014 season, the pest caused losses of $2.2 billion. Paraguay is currently in observation of concentrated areas of the earworm. In Argentina, although this insect is currently present, there are no reports of damage.

  • 3. Yellow Shoot Disease or HLB (Candidatus

Liberibacter spp)

Market Insight 2. Earworm ( Helicoverpa armigera ) Type: Pest Crops affected: Soybeans, cotton and corn

Type: Bacteria transmitted by insect Crops affected: Orange, lemon, lime, grapefruit and tangerines Yellow shoot disease is one of the most serious diseases of citrus crop. It causes the death of the tree

irretrievably. The disease is transmitted by an insect called the Asian citrus psyllid and affects leaves, stems, roots and citrus fruits.

Losses:

In Paraguay during 2013, 20% of citrus fruit were affected. In Mexico 526 thousand hectares of citrus in 23 states are threatened by the plague. In Brazil during 2013, 64% of the plots were contaminated. North of the province of Misiones, in Argentina, an outbreak of the disease concerned authorities and producers. Costa Rica, have made investments of about $1 million in prevention campaigns.

  • 4. Asian Rust (Phakopsora pachyrhizi)

Type: Fungus Crop affected: Soybean and other legume species This is a biotrophic fungus, which can cause early defoliation of plants and in severe cases it can affect pods and grains. Factors such as

Market Insight 2. Earworm ( Helicoverpa armigera ) Type: Pest Crops affected: Soybeans, cotton and corn

excessive rainfall, late applications of fungicides and large amount of fungus inoculums cause high losses.

Losses:

In Brazil, during the 2012/2013 season, there were losses of $738 million. Until now, their control has been to the value of $21 billion. During the 2000/2001 season, cases of Asian Rust were reported

in Paraguay for the first time. That year there were losses of up to

50%.

  • 5. Crown Rot (Phytophthora palmivora)

Type: Fungus Crop affected: Palm This disease produces young tissue rot, impairs the issuance and maturation of new

arrows and stops the growth of the plant.

Losses:

It is responsible for the disappearance

of entire plantations in Panama, Colombia, Suriname, Brazil, and Ecuador.

Market Insight 2. Earworm ( Helicoverpa armigera ) Type: Pest Crops affected: Soybeans, cotton and corn
Market Insight 2. Earworm ( Helicoverpa armigera ) Type: Pest Crops affected: Soybeans, cotton and corn
  • 6. Black Sigatoka (Mycosphaerella fijiensis

Morelet)

Type: Fungus Crop affected: Banana Black sigatoka affects the plant

growth and production. It reduces the capacity of photosynthesis and yield of crops.

Losses:

Market Insight 2. Earworm ( Helicoverpa armigera ) Type: Pest Crops affected: Soybeans, cotton and corn

Black sigatoka has caused 27% of crop losses in Central America as well as 50% – 100% in Colombia. In 2012, Black sigatoka had

caused 35% of crop losses in Ecuador.

  • 7. Frosty Pod Rot (Moniliophthora roreri)

Type: Fungus Crop affected: Cacao Frosty pod rot is a disease caused by the fungus basidiomycete

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Market Insight

which is characterized by causing necrosis, warp and rot of cocoa ears. The internal damage is more serious than the external which means almost all of the almonds of the fruits will be ruined.

Losses:

Market Insight which is characterized by causing necrosis, warp and rot of cocoa ears. The internal

Frosty pod rot has caused 80% damage to the Cacao crops in Peru, 70% damage in Colombia, 60% damage in Ecuador and 30% - 100% damage in Nicaragua.

8. Potato White Worm (Premnotrypes vorax)

Type: Pest Crop affected: Potato The white worm is a bedbug with terrestrial and nocturnal habits and can be found in the

South American Andes. When in a state of larva, they produce irregular deep drilling in tubers and the shaped adults feed on leaves.

Market Insight which is characterized by causing necrosis, warp and rot of cocoa ears. The internal

Losses:

During 2013, Ecuador suffered losses between 20% and 50% to

their crops. Colombia also suffered losses to their crops by up to 50% as well as Peru by up to 30% and Venezuela by up to 50%.

9. Stink Bugs (Dichelops furcatus, Dichelops melacanthus, Piezodorus guildinii, Euschistos Heros, Nezara viridula)

Type: Pest Crop affected: Soybean They are sucking insects of the hemiptera group with incomplete metamorphosis (several stages to adulthood without going through a

Market Insight which is characterized by causing necrosis, warp and rot of cocoa ears. The internal

stage of inactivity), mainly eating grains and pods.

Losses:

During the 2012/2013 season in Brazil, stink bugs had caused losses in productivity of 180 to 300 kg/hectare. In Argentina, during 2012 stink bugs had caused reductions in

yields in some batches between 25% and 40%. Stink bugs are also

appeared in Paraguay but there is no official data.

Market Insight which is characterized by causing necrosis, warp and rot of cocoa ears. The internal

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Interviews

Interviews Editor's Note: Latin America accounts for a quarter of the global seed treatment market. AgroPages

Editor's Note: Latin America accounts for a quarter of the global seed treatment market. AgroPages discussed with C sar Lamonega, Asset Director at Bayer CropScience Latin America, challenges that the industry may face as well as Bayer's role in biological products and stewardship measures.

Interviews Editor's Note: Latin America accounts for a quarter of the global seed treatment market. AgroPages

Q: How would you describe the role of Bayer CropScience in the Latin American seed treatment market over the past 100 years?

A: Bayer CropScience has always been a pioneer. The company recently celebrated a century of innovation in seed treatment. In Latin America too we have been in business for almost a century. Uspulun, launched

by Bayer in 1914, was the very first seed

treatment product on the market and was sold in Argentina shortly after its launch in Germany. Bayer also pioneered the

approach to the market ten years ago with the acquisition of Gustafson, a renowned U.S. equipment manufacturer. From then on we started using equipment to teach technology to our customers, and in 2013 Bayer was under the top 2 seed treatment company of the World and third biggest in

Brazil. We are very confident that we will

recover the number one position in Latin America in the next few years

Q: How would you describe the Latin American seed treatment market in

terms of figures?

“It’s all about stewardship”

- Interview with César Lamonega

A: Brazil and Argentina represent 80% of the Latin American market, followed by Mexico and Paraguay. In Brazil for example, 80% of soybean seed is treated on the

farm, and in Argentina the figure is 90%, as

soybean growers there produce their own

seed. But the market is developing strongly towards industrial treatment. Take corn for example. Most of the seed is treated with industrial equipment and that is our focus for good reasons: First because the treatment is much better but more so because we want to reduce to a minimum the dust that comes from the seed. That’s why we recommend growers to use seed that is already treated.

Q: Why does Bayer want to grow more into biologics?

A: Bayer is very keen on biological solutions. That started some years ago

when we launched our first biological

product VOTiVO and evolved to the acquisitions of AgraQuest, Prophyta and

now Biagro. We definitely want to grow

into biologicals because of their different mode of action and environment friendly

profile. Biological crop protection products,

in combination with our state-of-the-art chemistry, are a great tool for the growers to manage resistance. Furthermore, inoculants

“Making sure that what we sell to our clients is not just the best possible but also sustainable solution, which is equally important.”

So one main objective for Bayer is to equip and train seed companies and multipliers with professional machines.

Q: In March 2014 Bayer announced the acquisition of the Biagro Group in Argentina. Do biologicals now play a more important role for Bayer?

A: Absolutely. The Biagro Group is one of the major players for inoculants in Latin America. They have been an important driver for the adoption of biofertilizers especially in Argentina and Brazil. Right now we have inoculants that are applied as on- farm treatments but we now want to develop industrial inoculants.

are the most efficient way to make nitrogen

available to plants. So it’s a really effective and cheap way in comparison to common fertilizers.

Q: Will there be more acquisitions to strengthen Bayer’s success with biological crop protection products in Latin America?

A: We are continuously looking for further opportunities, but surely we cannot talk about them now.

Q: When we take a look at the whole seed industry in Latin America are there any major challenges ahead?

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A: Yes, I think that we are at a turning point right now. Because when we talk about soybeans and corn, we need to get to the next step in control of insects through innovative traits. For instance, last year we observed that traits introduced to control Lepidoptera insects in corn did not perform as expected. So this is one big challenge. Last year, soybeans varieties containing these traits were launched in Brazil and Argentina with promising results. Over the past couple of years a new Lepidoptera pest, Helicoverpa has been growing as a problem and the damage it does is really bad. So it will be interesting to see whether seed companies have these traits that will work on Helicoverpa armigera for example.

Q: Will that be the only challenge?

A: I think something that has to be prioritized is plants that are resistant to stress and still produce high yields. Because there will be 9.7 billion people in the world by 2050 and feeding them is a top priority. So technology has to be improved as agricultural acreage is getting more and more scarce.

Q: Another hot topic is dust exposure. What exactly is Bayer doing to minimize dust?

A: We have been working a lot on this. In the first step we took samples of treated

seeds in several Latin American countries and measured the dust that came out. This helps us to adopt measures to minimize this exposure. A very important thing that we offer is coatings. Coatings minimize dust many times over. Unfortunately this is something that is not common practice at the farm level in Latin America at this point but it is, at industrial seed treatment sites. When we approach a new seed multiplier, distributor or even big grower

who treat seeds the first thing we do is

assessing the facilities and recommend changes to minimize dust exposure. With

Interviews

A: Yes, I think that we are at a turning point right now. Because when we

equipment too, but not their own equipment. We are the only company that provides solutions in all 4 areas of competence based on in-house development and manufacturing. So we can offer custom- made solutions through our Bayer SeedGrowth™ Centers.

our 4 Bayer SeedGrowth™ areas of competence – products, coatings, equipment and services – we are well positioned to offer appropriate and tailored solutions.

Q: How would you describe your role there?

A: I always say that we have to educate the customers so they know how to use our products responsibly and safely. Not least because adding a coating makes the treatment process more complex. You need to know when and how to apply it. But obviously, I am talking about the future here. Coatings are still not common practice at farm level. But it is something we must keep an eye on for the future. So we do have an important role at this point especially when it comes to sharing our expertise and equipment in seed treatment.

Q: Are you aiming at Bayer’s SeedGrowth Centers?

A: Exactly. Our Bayer SeedGrowth™ Centers are technology centres where we train people to treat seed the right way. That is one of the services we offer. Through our three SeedGrowth Centers in Latam, Brazil, Argentina and Mexico, we have already trained 4,000 technicians over the past few years.

Q: We talked about products, coatings, equipment and services, all parts of Bayer SeedGrowth. How has the response to the brand been in recent months?

A: It has been great. Before its launch customers did not realize that we can offer complete solutions. Other companies offer

Q: Let’s end by taking a look at the future. What is Bayer aiming to achieve in the next few years in Latin America?

A: Our main aim is to maintain our leading role in seed applied technologies. The second aim is related to stewardship. Making sure that what we sell to our clients is not just the best possible but also sustainable solution, which is equally important.

About César Lamonega

Bayer’s Asset Director for SeedGrowth and Third Party Relationships for Latin America is a seasoned professional with more than 37 year experience in the Crop Protection market. In 2009 he joined AgraQuest in California. After the acquisition, he moved back to Brazil to assume his current role at Bayer CropScience.

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Interviews

CAC Exhibitions

- Grow Together with the Chinese Pesticide Industry

The successfully closed China International Agrochemical & Crop Protection Exhibition (CAC 2014) marks the 15-year harvest of the world largest agrochemical exhibition. In recent years, booming overseas exhibitions also benefit more and more companies who are interested in the markets beyond China. The Vice Chairman of CCPIT Sub-Council of Chemical Industry (CCPIT Chem), Ms. Ma Chunyan talks to AgroPages about the growing course of CAC and the achievements they have made.

Q: How would you comment on the development and achievement of CAC over the last 15 years?

A: Since the initiation of the 1st CAC in Beijing in 1999, we have been endeavoring to establish a global agrochemical exchange platform with the conception of “the Agrochemicals of the World, Gathering together”. I can say that the achievement that has been made so far is a result of the 15-year development. The 15-year development of CAC is a representation of the development of the Chinese pesticide industry. Starting from 1994 when China’s pesticide export value exceeded import value, China’s export started to grow continuously at a high speed. In 2013 China’s pesticide export reached 1.60 million tons covering territory of over 160 countries and regions. Meanwhile CAC has developed in line with the grown scale of pesticide industry; also the CAC platform has provided agrochemical enterprises with convenient export access. In March each year, CAC not only presents to the world the Chinese pesticide industry, but also gives an exhibition of Chinese fertilizer, pesticide production machinery, pesticide application

appliance and business consultancy service. The number of CAC exhibitors has grown from the past less than 100 up to the present nearly 1,000; the number of trade visitors from more than 120 countries and regions has reached nearly 30,000. CAC today has grown to be the world largest trade exchange platform of agrochemical industry, which has become a “price watershed” of world pesticide prices, as well as a “window” of promotion of trade brand for industry players. CAC provides a chance of industry gathering for exchange of ideas on market, future tendency, new technology and novel product.

Q: CAC has made great contributions to the exchange between Chinese pesticide industry and the

world pesticide industry. What is your feeling of the functions of CAC in this regard? A: 15 years ago very few Chinese agrochemical enterprises were acknowledged by foreign companies, except for the several prime Chinese enterprises who were doing exporting business; at

that time our technical level was at a low side. Later on, our enterprises started to participate in CAC where they have come to know the demand from international market

and could find opportunity of export via this

most active industry platform in the world. Furthermore, our production enterprises have learned from the exchanges with the world advanced companies as how to

improve themselves to fill up the gap via the

input into the research work and upgrade of facilities.

Q: Over the recent 2 years, CAC is

going global with its presence in more

Interviews CAC Exhibitions - Grow Together with the Chinese Pesticide Industry The successfully closed China International

Ms. Ma Chunyan Vice Chairman of CCPIT Chem

and more countries. What do you think

will be the influence of CAC overseas

exhibitions to the global agrochemical development?

A: CAC overseas exhibitions are an extension of CAC Shanghai; they complement each other. After the CAC Shanghai each year, we would organize CAC overseas exhibitions in selected regions as a follow-up to assist enterprises in sorting out issues that were left over from CAC Shanghai, such as the details of contract; also to help enterprises to better understand their target market such as the local law, market entry requirement, crop structure, pesticide application, sales

channel and even local folk custom to enable a smooth entry into the target market with differentiated strategy taking into consideration of local characteristics. In the meantime, we help local enterprises to get into touch with Chinese enterprises.

Q: What will be the highlighted subjects expected in the forthcoming Brazil AgrochemShow?

A: No.1: Concerns of enterprises We will invite officials of MAPA to

elaborate on the reassessment requirement on neonicotinoids pesticides, abamectin, glyphosate and paraquat, which will guide

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Interviews

enterprises to formulate their marketing strategy. No.2: Market division in Brazil Experts will be invited to

give analysis so as to inspire enterprises how to deal with issues like the market division, sales of the registered product,

establishment of a high-efficient

marketing system for sales of the preferred brands, which will guide enterprises to formulate their marketing plan. No.3: Access to the most active business platform in South America Brazil AgrochemShow is the only specialized agrochemical trade platform in Brazil, which has been held for 6 sessions starting from 2005. The Exhibition has now become a highly recognized brand exhibition in Brazil and South America, which has so far attracted the participation of more than 200 exhibitors accumulatively; over 2,000 trade visitors have attended the exhibition coming from 18 countries and regions, which has greatly facilitated the agrochemicals from all over the world

Interviews enterprises to formulate their marketing strategy. No.2: Market division in Brazil Experts will be invited

to enter the market of Brazil and South America.

Q: What is your expectation toward the future prospects of Chinese pesticide industry?

A: I think that the Chinese pesticide industry in the future needs to be restructured as supported by government policies, in a purpose to facilitate the upgrade of productions while phasing out of the out-of-date facilities. Industry mergers should be encouraged to ensure long- term sustainable development and to form

more big enterprises with a turnover of RMB10 billion or above. I am looking forward that more technical innovation will take place in the Chinese pesticide industry, which will create more novel products of Chinese independent intellectual property for sales in the international agrochemical market. I hope Chinese enterprises to make more studies on the international market and speed up the establishment of distribution channels for the landing of more Chinese brands. Meanwhile I expect more Chinese pesticide enterprises will perform their social responsibility via effective input to make contributions to the protection of our living environment. I avail myself of this opportunity to give my best wishes to CAC Shanghai and CAC overseas exhibition, which is a good platform for the globalization of Chinese pesticide industry and for the landing of Chinese brands in the international business arena.

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Interviews

More Companies Registered Bio-pesticides in 2013

Editor's Note: According to data released by the Brazilian Crop Protection Industry Union, the Sindiveg, Brazil's agrochemical sales jumped by 18% to US$11.454 billion in 2013. Ivan Sampaio, Information Manager of Sindiveg told AgroPages the main factors that driving market growth.

Q:

According to the report published by Sindiveg, Brazilian agrochemical market gained positive growth in 2013,

what have been the major factors for market growth?

A: The positive growth published is justified mainly by the expansion

of the planted area in Brazil and the need to combat new pests in the agriculture - among which we can mention lesser cornstalk

borer, soybean looper, fall armyworm, silverleaf whitefly, cochineal,

nematode and helicoverpa armigera. These attack especially cotton, corn and soybean plantations. The insecticides registered the highest growth in commercialization, being responsible for about 40% of agrochemical’s sales in 2013.

Q:

Were there any negative factors impeding market development?

A: The difficulties found in the regulatory system are the main barriers to the development of the agrochemical industry.

Q:

What impact did earworm and soy rust have on crops and agrochemical industry in 2013?

A: The Sindiveg have no data regarding a specific pest, but it is speculated that the earworm contributed specially to increase the commercialization of insecticides. The soy rust had a lower rate in 2013 compared to 2012.

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Q: What products

were re-evaluated or restricted during

2013?

A: There are many toxicological and environmental revaluations in process. In 2013, the acephate revaluation was completed.

Q: How many

pesticides approved for registration in 2013?

Interviews More Companies Registered Bio-pesticides in 2013 Editor's Note: According to data released by the Brazilian

A: According to the Ministry of Agriculture, 110 agrochemicals were approved. The timing for approval is between 36 to 48 months.

Q:

As far as we know, many companies have registered

or introduced some bio-pesticides in Brazil these two

years, what are your expectations of the development of bio-

pesticides in Brazil?

A: This is a new segment of the agrochemical industry. Sindiveg has no solid data for the development analysis but believes this market is expected to grow in coming years.

Q:

What are your expectations of market trends in 2014?

A: For this year, Sindiveg forecasts a growth of 6% to 9% in the agrochemical industry. The main reason for the optimistic outlook is the expected 3% to 5% increase in planted area, plus intensive use of advanced technologies.

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Viewpoints

Viewpoints Author: Flávio Hirata Mr. Flávio Hirata, MBA, agronomist, partner to AllierBrasil. He can be reached

Author: Flávio Hirata

Mr. Flávio Hirata, MBA, agronomist, partner to AllierBrasil. He can be reached at allier@allierbrasil.com.br

For the third consecutive year, the

Brazilian pesticide market has been ranked # 1 in the world by a considerable

margin. In one of the most profitable

and concentrated agricultural markets in

the world, it is not difficult to understand

that access to that market will be

proportionally as difficult to realize as are

the opportunities. In the Latin America region where sales in 2013 where almost US$15 billion, Brazilian sales represent 79%. The second largest market in this region

is Argentina with sales of US$2.5 billion. In the world, Brazil represents 21% of the entire US$55.66 billion market. In a such large market with many lucrative opportunities is easy to imagine that there would be hundreds or even

thousands of players fighting to enter

the market, or if already in, to increase their market share. Indeed, competition

is fierce, but less than 100 players are

currently present in the market. The top 10 players are global companies accounting

Brazilian Pesticide Market

More Barriers for Access

for 84% of the total market of US$ 11.6 billion.

The top 20 players have combined sales of US$11.5 billion and represent more than 95% of the market, but of the 20 there is only one Brazilian company.

Why then in a field of tremendous

opportunities would there be so few players? Are the barriers to access in this

possible exception of Argentina. Perceptions changed and decisions to access this growing market started

to increase in 2006 after changes in regulatory laws and the issuance of a new presidential decree established a path to new product registrations based on equivalency. In addition to

a clearer definition of the proceedings

market so difficult to overcome that only

few companies are able to succeed? Several companies have been trying to access this market for years. Some of them succeeded but most of them, after considering the entrance barriers, chose to abandon such challenging task. On

the other hand, many of them have been trying to launch their own products for years. Since 1999, AllierBrasil has been discussing with foreign players the opportunities presented by the Brazilian pesticide market. At that time the market was US$2.32 billion but because of registration costs, totaling as much as US$500,000, most of them decided to

for registration, the cost dropped to US$250,000 along with a reduction in the

time required for registration approvals to 1 or 2 years. Several new players

had the foresight to invest significant

resources in laboratory trials to take advantage of this opportunity while others waited to see what would happen. One such example is CONSAGRO. During this period, CONSAGRO obtained registration approvals in as few as 12 months, illustrating one of the most skilled strategies to access the market through registration. Unfortunately, many local companies lacking manufacturing experience

focus on faster and cheap registration markets, such as in Asia, Eastern Europe and Argentina, in spite of the fact that in those countries the perspective of agriculture growth was limited, with the

Fig.1 Pesticide Sales (US$) per Region (2013)

Viewpoints Author: Flávio Hirata Mr. Flávio Hirata, MBA, agronomist, partner to AllierBrasil. He can be reached

Source: Phillips McDougall

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Total sales of Latin America is US$14.547 billion

Viewpoints Total sales of Latin America is US$14.547 billion Fig.2 Top Ten Players Market Share (Brazil,

Fig.2 Top Ten Players Market Share (Brazil, 2013)

attempted to source product from suppliers claiming to have factories capable of manufacturing suitable product but in fact had

no factories at all or one that could synthesize a product which could meet the

registration standards required in Brazil. As a result, millions of dollars were wasted and projects were delayed. Because of these issues, a considerable number of potential registrants spent twice the amount

of money actually needed to secure the desired registrations. These are not entrance barriers created by the market, but those due to a complete lack of experience by those responsible for sourcing and securing the desired registrations.

Even for companies with market experience and financial

resources, there are other issues that can negatively impact the

cash flow of any project attempting to access a given segment of the

Brazilian market. Some of those issues are described below:

Registration:

  • - Frequent changes in regulatory laws.

  • - Not knowing how best to execute a registration application.

  • - Drastic decrease in the number of registration applications being evaluated.

    • - Tremendous increase in the number of new registration

submissions.

  • - Increases in the time required for registration approval to 4-6 years in some cases.

    • - Legal action against regulatory agencies and competitors.

    • - No timeframe perspective on registration evaluations/approvals.

  • - High number of registration rejections (26%), in some cases without clear reasons.

    • - Preference given to organic and biological registrations.

  • - Agency review of registered products delaying evaluation of new applications.

    • - Sales permit for emamectin benzoate without registration.

  • Credit and Payment Term:

    • - Overly optimistic guaranties from buyers without firm market

    commitments.

    • - Payment term from 90 days up to 360 days.

    • - High credit risk.

    • - Interest rates from 1% to 1.5% per month can potentially obliterate the sales margin.

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    Distribution:

    • - Dealers prefer a broad product portfolio in order to better

    service end users and to obtain required guaranties for credit with suppliers/distributors.

    • - Big dealers and cooperatives are very committed with big suppliers/distributors.

    • - “Bundling” low margin products together with high margin products by same suppliers.

    • - Low margin sales through cooperatives represent almost 50% of total sales.

      • - Regional dealers/distributors are becoming more important

    due to the lack of countrywide distributors.

    Despite of all barriers and difficulties to access this market,

    more and more new players are willing to face such challenges.

    Many of these subjects shall be discussed with experts in the following venues:

    • - 7th Brasil AgrochemShow August 18th and 19th in Sao

    Paulo, Brazil;

    • - 3rd Forum AllierBrasil - India, October in India;

    • - 4th Forum AllierBrasil - China, in January, 2015 in China.

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    Viewpoints

    How to Cope with Volatile Economies in Latin America?

    Viewpoints How to Cope with Volatile Economies in Latin America? By Dr. Alberto L. Zuppi Thinking

    By Dr. Alberto L. Zuppi

    Thinking in the vast agricultural extensions of Latin American it is easy to realize that the potential agrochemical

    market is huge as well as the benefits

    accordingly, but taking part of it involves

    certain risks that you may ponder before concluding a sale. Several South American countries are affected by chronic volatile economies. Symptoms are easily recognizable:

    inflation, strong participation of the

    central Government in the economy, disproportionate increase of public expenses, currency exchange controls

    and difficulties in returning home capital

    investments. When these symptoms appear in everyday economy, usually local debtors immediately begin to show a remarkable reluctance to pay any foreign debt, because

    daily inflation erodes the capital due and the

    gap between the official exchange rate and

    the real value of foreign currency -generally shown at the black market- diminish the original debt with just the passing of time.

    When the debt is finally settled, the real

    credit could have lost as much as 60 or

    70% of its original value in a short period of time. In Argentina, at the time of writing these lines, the difference between the

    official exchange rate and the black market

    is near 45% whereas the inflation rate is

    approaching to more than 40% yearly.

    Having considerable inflation as it happens

    in Argentina or in Venezuela means automatically that the related Government will implement some restrictions on currency exchange, limiting or prohibiting the free exchange, and usually transforming

    repatriation of investments or profits into

    a difficult or impossible proceeding. If

    the debtor is obliged by contract to pay in strong currency, when being prevented to

    freely buy foreign currency, the credit will be

    legally paid in local currency at the official

    exchange rate. Exceptions are rare. How can you be protected against these problems? First thing, look for local assistance. A local counselor will inform you

    about the specific difficulties that you may

    find in a given market and the best way to

    cope with them. If you are facing a scenario where no hard currency could be used even for obtaining a fair rate of exchange, but you still want to participate, a couple of postulates should be applied: First, try to get a written contract. Despite most of international sales are oral, or concluded by phone or even through the internet, you should try to maximize some precautions, and making a written contract is one of them. If no strong currency could be used as a means of payment and you would be accepting local currency, then turn your frame of reference to commodities like soybeans, petrol or coffee. You are going to arrange that if, for any reason, the payments

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    Viewpoints

    could not be done in your desired currency, then you would accept local currency in an amount enough for buying a determined quantity of commodities in a given market. We used this alternative with success when the Argentine Government impeded any indexation of contracts. Do not believe that you are going to earn a lot of money with this solution. What you are going to do is avoid is an economical disaster that you will exchange for a not-so-bad business. Secondly, export insurance is a main precaution that exporters should take. Its relative low cost (around 0,35%) and the ample percentage of the credit covered (85%) assures the seller that in case of non- payment of the credit due by the debtor -usually letter of credits- premiums are recovered against the presentation of a claim for bankruptcy of the debtor at the local court. Being an easy way to get covered, it is also transformed in a formidable bargain

    tool for compelling the debtor to reach a payment agreement through your counselor. However, be aware that when shortages of strong currency in the open market take place, the subrogated creditor will have problems collecting its credit which will be recovered in local currency. As means of payment, certainly a

    confirmed letter of credit is the best alternative for the first sale. However,

    being realistic, it is so expensive that, as

    an exporter, you are going to lose your potential buyer if you insist on it. If you are giving credit to you buyer, a private letter

    of exchange works as a fine alternative

    but always use a bank as intermediary. However, some precautions should be taken when drafting the letter of exchange.

    Be aware that one of the major merits of the letter of exchange is that it is a document easily and quickly enforced by the judiciary.

    it will not work for a fast track proceeding

    and you will lose one of the virtues of the letter of exchange. Never, ever put as date for payment something like “60 days after issuing B/L.” First, acronyms in foreign language should be avoided, but secondly and most important, if the due date could be determined only after issuing another document like the bill of lading, then your

    letter of exchange is not self-sufficient and

    will be engaged in an ordinary proceeding

    that could take years to finish.

    About the Author

    Dr. Alberto L. Zuppi works as attorney at law at Sena & Berton Moreno, Buenos Aires, Argentina, PhD Germany, former Robert & Pamela Martin Professor of Law, LSU, available at alzuppi@gmail. com.

    But if the document is not self-sufficient,

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    Why Can We Get Competitive in the Paraguayan Agrochemical Market?

    Viewpoints Why Can We Get Competitive in the Paraguayan Agrochemical Market? Author: German Pessagno Operations Manager

    Author: German Pessagno

    Operations Manager of Chemtec S.A.E.

    The agrochemical market in Paraguay is represented by three groups in which we can divide the market supply. Each of these groups is well individualized from each other and

    allows us to understand and analyze the market. This division corresponds to the first

    group as multinational companies, product normally we call ¨brand¨. On the other hand, companies importing formulated product ready for sale. Finally, the rest is companies that formulate locally. Our company Chemtec belongs to this last group and unlike the other groups, only import raw materials for local formulation. This division can identify which is the position of the market in terms of volume and price. The distribution of contribution of each sector can be summarized as follows:

    As can be seen in these graphs the distribution market is fairly balanced between the various players in the market. It is clear also that the average selling price is higher in the case of multinationals, with a market share of 30% in volume but 45% in their turnover. The global market has achieved sustained grow since 2010. During 2013, in terms of

    USD CIF, rising prices increase in both raw materials and finished products was reflected

    in increases in these amounts.

    Today Paraguay has a total of more than 5,500 formulated products registered in SENAVE with 160 registrants companies, based on approximately 270 active ingredients. If we compare with other countries in the region, Argentina has 4,150 registered formulations

    from 338 registrants based in 437 active ingredients, Brazil, with the registration difficulties

    we all know, holds only 660 formulated products from 126 registrants. This means, Paraguay has, on average, for the same active ingredient, more than double registered products than Argentina. It is clear that compared to the markets of Argentina and Brazil, the huge amount of players in the Paraguayan market make of it a highly competitive market.

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    Paraguay Market In Volume (kg / lt) 2012

    Viewpoints Why Can We Get Competitive in the Paraguayan Agrochemical Market? Author: German Pessagno Operations Manager

    Paraguay Market Invoicing (USD) 2012

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    Viewpoints This is a clear picture of the strong relationship between business development and the process

    This is a clear picture of the strong relationship between business development and the process or registration requirements.

    Competitiveness

    We have seen the significant presence of Chinese industry in the Paraguayan market. This presence is significant both in its strong presence in the distribution market, as well

    as in the number of registered companies and products. The local industry is in a constant

    challenge in terms of how to maintain competitiveness against this strong presence of Chinese products.

     

    Duties

    Local Formulation

    Imported Formulated Product

    Imports:

     

    Active Ingredients

    Formulation additives

    Between 6% to 14% Duties

    0% Duties

    This competitiveness is achieved from two fields. On one hand, maintain and ensure

    the quality of products and technical assistance.

    Let’s take Chemtec as an example, the mission of Chemtec is based in the quality assurance of their products and this made possible us to consider as a leader in the development of new products and preserve our market presence, even competing with low prices products. This quality, added with a direct contact with customers, ensures the quality of our product throughout the cycle, from the selection of our suppliers abroad, control

    of raw materials, finished goods control

    and aftersales feedback. The commercial factor coupled with a strong development work keeps our product portfolio updated according to market requirements. Moreover, an important point on competitiveness depends directly on

    the influence of government policy in

    terms of protecting local industry. Today Paraguayan industry continues to grow and as such has generated greater pressure to the government seeking for protection. The industry now has some custom duties and tax advantages that keep this competitive. These advantages

    can be summarized as follows:

    Import Duties:

    Due to a presidential decree, all raw materials involved in the formulation

    process, are exempt off any duty for local industries.

    This benefit applies only to established

    local industries and directly affects the cost of products.

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    As you can see, the local industry can take advantage of the exoneration of the import duties, improving the competitiveness against imported formulated products.

    Taxes:

    Below image is the comparison of tax regimes between Paraguay and the other countries in the region. That’s why the local formulators like Chemtec can stay competitive to other markets and so, increase their productions.

    Tax benefits for investments:

    This benefit allows the company to get some support for investment

    in infrastructure and equipment also allows local industry to keep updated in equipment and technology for improving formulation competitiveness. Also, on the same objective, local authorities, both Customs and

    the Ministry of Industry and Trade have increased controls to reduce the entry of irregular products. Whether smuggling, under-invoiced

    goods as well as controlling certificates of origin for products entering from member countries of MERCOSUR, where those certificates are

    of dubious origin. These measures allow healthy competition on equal terms.

    Viewpoints As you can see, the local industry can take advantage of the exoneration of the

    Registration

    As I mentioned before, the registration process not only ensures the

    quality and safety in the handling and use of plant protection, but it plays an important role in competitiveness in the market. Like other countries in the region, Paraguay began in 2006 a process of adaptation of its registration system and adopted the ¨Me Too¨ (Equivalence) registration method. As has Argentina (in the late 90s), Brazil and most recently Chile, Paraguay based it´s registration regulation in FAO guidelines. In terms of documentation, registration requirements are very similar to those of Argentina. The process requires, in short, the submission of:

    Registration of Equivalent Active Ingredients:

    File I: Expedient: Registration data’s, samples data, MSDS

    File II: Confidential Information: Identity, Manufacturing process, Five

    batch analysis, etc. File III: Technical Data: Physical-Chemical properties, toxicological studies, aspect related to its use

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    File IV: Other information The company interested in registration

    must be registered in SENAVE. After that the company can start registration. Registration of Formulated products based on Equivalent Active Ingredients:

    File I: Expedient. Company Information. Product General Information, Samples, MSDS

    File II: Confidential Information. Identity,

    Formulation Process, Five batch analysis,

    Certificate of origin.

    File III Technical Data. Composition of the formulated product.

    Physical Chemical studies, Physical properties related with use, Methods of application, labeling, packing, Handling

    specification, Acute Toxicological studies

    and data of effects on the environment. The regulatory process involves the registration of both technical grade and formulated grade, even if the product is formulated locally or abroad. As you might see, the documents needed for registration are similar to other countries, which makes easier for local or abroad companies to expand their registration to other countries in the region. Since the beginning of this process, the revalidation of registers has not been a simple process and unfortunately has been very messy. The constant changes in the regulatory authorities and the pressures of the various sectors have led to the system of revalidation and

    registration to suffer constant changes and patches. The process has been like a pendulum, for certain periods the all the process was at a ¨standstill¨ where all the

    files were ¨stopped¨ , then due to some

    pressure or authorities change it moved to periods where records were issued

    with excessive flexibility, thus generating

    a number of registrations that have cast doubt on the quality of supporting documents. Today, almost eight years after the start of this process, the regulator itself begins to normalize, the requirements are clearer and the whole registration is in the process to ensure the ¨quality ¨ of the supporting documents.

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    Viewpoints File IV: Other information The company interested in registration must be registered in SENAVE. After

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