South America Calling

Brazilian Crop Chemicals Market to Remain Firm

Brazil's crop chemical market will likely remain firm during the 2015-16 season despite a decline in demand for soybean crops.

The growth in insect-resistant Bt soybeans is lowering demand for insecticides but that will likely be offset by increased purchases for corn and cotton, according to William Marcel de Abreu, a Latin America analyst at Kleffmann, a specialist ag market research firm.

Monsanto's Intacta RR2 Pro Bt-stacked technology has proven effective in combatting the ever-present threat of the Helicoverpa caterpillar in Brazilian fields and farmers are using it in ever-greater numbers. Last season, the technology was adopted by a half of all farms and employed in around 20% of the Brazilian crop. In 2015-16, Intacta could be used on over 40% of the crop.

But while the Bt soybean reduces demand for premium insecticides, last year that was partially offset by increased spending on control of other bugs, said Abreu.

Meanwhile, in 2014 and 2015 there was an increase in diamide insecticide use because of the reduced effectiveness of first generation Bt corn. This trend will likely continue.

Brazilian grain crop input costs have risen dramatically because of the devaluation of the real, which has fallen 29% against the dollar in 2015. But crop chemical demand has not been greatly impacted, said Abreu.

"We need a big drop in area to reduce demand. Brazilian farmers don't want to risk reducing losing crops and thus losing profits," said Abreu.

Brazil is the world's biggest crop chemicals market, totaling $8.8 billion in 2013. Soybeans are the main drivers for the market, accounting for approximately 40% of Brazilian demand.

Brazilian crops have been under increasing pressure from disease and insects in the last five years, which, allied to expanding area, has underpinned growth in the crop chemical market.

Six major players dominate the local market. In 2014, Syngenta, Bayer, BASF, Monsanto, Dow AgroSciences and DuPont commanded 70% of the market.



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