Brazilian agrochemical market falls by 10.4% in 2020_Hefei Finest Chemical Industry Co., Ltd.
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Brazilian agrochemical market falls by 10.4% in 2020

Word:[Big][Middle][Small] 2021/3/24     Viewed:    

The agrochemical market in Brazil had a 10.4% reduction in dollar value in 2020, with revenues of US$12.1 billion as against $13.5 billion in 2019. 

The data refers to applied products and is released by the National Union of Plant Protection Products Industry (Sindiveg).

"From January to December 2020, the exchange rate loss was 18.5% for the sector," stated the President of Sindiveg, Júlio Borges. 

"The consistent devaluation of the real against the dollar is an important challenge for the pesticide industry since most of the costs are in the import of inputs and raw materials," he said.

According to Borges, due to the high exchange rate variation, it has not yet been possible to fully pass on the increase in costs in 2020, which should happen this year. However, the increase in input prices is expected to be exacerbated by rising raw material prices in China, as well as the cost of logistics, which has doubled due to shortages of containers and ships.

“The appreciation of the Chinese currency against the dollar, driven by the prospect of growth in the local economy, which is expected to reach its highest peak in two years, and the general increase in the costs of raw materials and packaging - such as cardboard and resins - have been pressuring the industry to readjust its prices for the next harvest,” Borges explained.

Despite the fall in the value of products invested in dollars (1.4 percentage points lower than the projection made by the entity in December), in real terms, the value of the crop protection product market increased 10%: from R$53.8 billion to R$59.1 billion. In US currency, it is the first time that the sector has had a drop in sales in five years analyzed.

Sindiveg pointed out that the size of the pesticide market is not measured by the value of the products sold by the industry, but by the price that the rural producer pays for the inputs that he uses on his property. Thus, in this value, in addition to the industry's trade cost, the distributors' profit margin is also embedded.

“It is important to note that the area treated with pesticides was larger in 2020, mainly due to two factors. One of them is the expansion of the planting area for several crops. Another fundamental reason is linked to the increased pressure of phytosanitary challenges in crops, especially insects, fungi and resistant weeds,” the union president highlighted.

The area treated with pesticides grew 6.9% in the country, reaching 1.6 billion hectares (107 million above 2019). The calculation of the treated area considered the volume of products and input applications, as well as the cultivated area, and helped to understand the scenario of the use of pesticides, which are essential for the country's agricultural productivity.

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