Biopesticides in Brazil Growth Rate Double Than United States or Europe
10 May 2023
Welcome to AgriBusiness Global Report, where AgriBusiness Global Senior Editor Jackie Pucci brings you interviews with executives and experts working in the agrochemical, biological, and plant health industries in a 10-minute show. For this episode, Pucci interviews Mark Trimmer, Managing Partner at DunhamTrimmer, to talk about the fastest growing biologicals markets – including why biopesticides in Brazil are leading in growth– and the adoption of biopesticides in row crops, as well as his predictions for 2023 and beyond.
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ABG: Mark, I wanted to ask you what your biggest takeaways are from ‘22 in the biopesticides space. What do you expect in ‘23?
Well, thanks a lot. Jackie, it’s a pleasure to be here. Getting in the market there are a couple of dynamics that are happening globally that are having a bit of major impact on the market. First off, and probably most importantly, the Brazilian market is exploding. And it is growing at a rate that is more than double the growth rate in the US, or in Europe. It is being driven largely by the use of biocontrol products and biostimulant products also, but mainly by biocontrols in row crops, and that has been something we’ve been watching to wait and see when that would really start to happen.
We had predicted, when we first started, that Brazil would probably be the first country to see significant use in row crops and that is now really beginning to come to pass. The majority of biological products sold in Brazil are used in the major row crops. We contrast that to the US – about 10% of our products are used in row crops. The vast majority of biocontrol products are used in specialty crops: the fruits and vegetables and tree fruit and tree nuts. So, it’s a much different dynamic that’s occurring, especially for biopesticides in Brazil.
The second big thing that’s happening right now is I’m beginning to see signs of market maturity in Europe, especially Western Europe, and in the US, and that’s a factor in both of those regions where historically, the major use has been in those specialty crops. We are reaching a point where the market is maturing, most of the needs have already been filled by products. There is a lot more competition than there was five or 10 years ago. So, for further growth to really occur in a dramatic way, in those regions, we’re going to need to see them expand into other crop segments. So that’s going to be important for future growth, but we’re seeing that the growth rates in those two regions starting to drop down into the single-digit range, definitely, by the end of this decade.
ABG: How much is adoption into row crops growing?
We are seeing some growth for sure, but in the northern hemisphere, it’s a slow adoption rate in row crops, for sure, and it really comes down to two things, I think. First off, within row crops, especially in North America, the predominant need for pest control is weeds. There is a total absence of effective bioherbicide products. Most bioherbicides are not selective, they don’t have long-term, residual control of the weeds. So a grower just has no option there to use a biocontrol product, and that represents nearly half of the crop protection market in row crops. Then you go to, what are some of the secondary pests. There’s some insect pests that are very important, but many of those in North America are being effectively controlled with GMO crops. So that leaves fungal diseases and things of that nature. There’s a little bit of use of biocontrol products there, but it still remains a minority. So it really is an area that we have not seen a big breakthrough yet, like there’s occurring for biopesticides in Brazil.
ABG: Is that a big area of focus? Do you think that for a lot of companies (bioherbicides) are the key?
There’s a number of companies that are looking at that area. Especially there’s a few that are looking actually and in the Wii control area with a focus on resistant weeds, so we could have resistance to pick them up the same other chemical pesticides. And I think that’s that’s a smart play because, you know, they only have to focus on a few species of weeds rather than the entire spectrum. If they can develop a an affected by a herbicide, that is a good mixer product. With the chemical. It would be an excellent way to manage pest resistance development. Yeah, so there’s a few companies out there that are really focused in on that and hoping to make a breakthrough in that area.
ABG: Can you talk a little bit more about biopesticides in Brazil, and what has been driving the market? I don’t know if you can get more specific on companies and products.
It’s a broad range of products, but the key drivers are, number one, their regulatory system has gone through a number of changes over recent years, which has made it much easier to introduce products into that country. Five years ago or a little more, when we looked at biopesticides in Brazil, we saw a regulatory system where it routinely would take three to four years to bring a product to market. And today, you can bring a new product onto the market in less than a year.
ABG: And that’s just for biologicals?
It’s for all products, really. Biologicals, and other biopesticides in Brazil, have benefited significantly. There are also government initiatives that support biologicals that assist companies that are starting up in this space, providing them with funding opportunities, through the government. But also, policies that encourage growers to use biologicals more frequently. All of these things are coming together.
If you ask about specific products or product types, I would tell you the area where we’re seeing the most growth is with microbial products, and specifically with bionematicide products. There is a wide range of companies that are bringing these to the market. Nematicides are a significant problem and for production in Brazil, the biologicals really seem to have found a strong niche there as either seed treatments or soil-applied products for control of nematode problems in row crops: soybean, corn, cotton, and a few others as well. It’s a huge market obviously. Right now, today Brazil represents, I think about 60% of the total Latin America. And by the end of the decade, I think they may grow to as much as 70%. They are growing faster than the other countries in the region for the most part.
ABG: Would you say that their regulatory framework is friendlier to biologicals than the US and Europe?
I don’t think it’s significantly more friendly than the US, possibly a bit because they have improved a lot, but they’re definitely significantly more friendly than Europe. Europe has a real challenge, because the introduction of microbial products, especially novel microbial products into Europe can routinely take a company five to 10 years to bring a new product. As a result, when we look around the world and see what percentage of the market is captured by microbial products, in the US and Brazil, it’s somewhere around 50% to 60% of the market is occupied by microbial based products. In Europe It’s more like 10% to 15%. It is a dramatic difference, and this is occurring at a time when Europe has other initiatives, where they’re trying to reduce the number of chemical pesticides available. So there are conflicting policies that the government is promoting, because on one hand they’re trying to remove chemicals, but they are not making it more friendly for biologicals to enter the market.
ABG: Can you talk about Asia, and any other regions of interest?
If we look at the market in 2021 on a global basis, it’s about $5 billion excluding PGRs; with the PGR-type products, about $6.2 billion. Of that market, about one-third is in North America. In 2021, about 25% is in Europe. Latin America, captures about 20% each with the remainder being in African and Middle Eastern countries. Now, we look forward to 2029 just percentages, we see are going to change dramatically. Because of that rapid growth in Brazil in row crops, we see Latin America going from a 20% share in 2021 to nearly 30% by 2029. They are going to surpass Europe by a wide margin. And they’re going to be essentially equivalent to the North American market inside at that time. Asia is also growing, not as fast as Latin America, though. So they’re going from about that 19% to 20% range to about a 22% share by 2029. Asia is growing based on, first off, the diversity of crops, but we’re seeing more use of biologicals occurring in China, India, and some of the other major producers in Southeast Asia.
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