Romanian Crop Protection Market Shows Long-Term Promise Despite Challenges

Editor’s Note: Several months ago, AgriBusiness Global planned a special report on Eastern Europe — long before the current situation between Ukraine and Russia became a global crisis. As the past two years have shown, the ag world must constantly prepare for the unexpected — weather, the onset of a global pandemic, and now war in Eastern Europe. As the largest producer of sunflower seeds, the 6th largest producer of both corn and barley, and 9th in both wheat and soybean, Ukraine is a major player in world agriculture. As of this writing, the conflict in Eastern Europe has escalated and the outcome and the long-term results are unknown. With this uncertainty, we have chosen to focus this report on other key countries in Eastern Europe. AgriBusiness Global is following the Ukraine situation closely and will offer analysis of the impact on agriculture as it becomes viable.

The dynamics surrounding Romania’s crop protection product market look mostly positive, this year, despite the ongoing pandemic and military escalation between Russia and neighboring Ukraine, according to recent statements made by leading Romanian ag analysts and crop input producers.

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The growth of the crop protection market will primarily be supported by the country’s rapidly growing agricultural sector, which continues its recovery from the consequences of the pandemic. Of course, another COVID surge or an extended military operation could hinder supply chains and temper expectations.

Prior to 2018, the rate of growth of the Romanian crop protection market was among the highest in the EU, reaching double digits in some years. However, bad weather conditions (drought), which have plagued Romania for the past several years, and an increasingly saturated market have led to the slowing of those growth rates.

Romania, already one of the largest agricultural producers in the EU, plans to further strengthen its positions in years to come.

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For manufacturers and distributors of crop inputs, hopes for growth in the country are centered on wheat production, which already this year is expected to exceed 10 million tonnes, making Romania the largest producer of that crop in the entire European Union. In addition, growth has also been observed in two additional Romanian crops — corn and sunflower.

According to Romanian analysts, the ongoing growth of agricultural production should lead to an increase in demand and consumption of agrochemicals among domestic growers. That will provide ample opportunity for global agrochemical companies to grow their operations in Romania.

One such company, Germany-based BASF AG, has in recent years been able to significantly strengthen its positions in the Romanian crop protection market. The company is considering a further expansion of its domestic business with the launch of new products.

Michelle Serr, an official spokesman of BASF Agricultural Solutions in an exclusive interview with AgriBusiness Global confirmed the importance of Romania for the company’s business.

“Romania is an important country for European agriculture and the agrobusiness remains a core business for BASF Romania,” Serr says. “The most important recent launch for BASF Romania into the agricultural market was the launch of the Revysol active ingredient and respective crop protection products.

“Revysol is the first isopropanol-azole, which belongs to the triazole chemical group. The active ingredient is characterized by very good selectivity, excellent disease control and a favorable regulatory profile,” Serr continues. “In Romania, BASF launched two cereal fungicides containing Revysol (Revystar Flex and Revycare), one dedicated to the first treatment and the other to the second treatment. The products are designed to support farmers by creating higher yields and saving natural resources such as water and energy at the same time.”

According to Serr, BASF supports Romanian farmers with an integrated portfolio consisting of customized solutions that fill farmer’s needs. For example, in 2021, BASF started a partnership with Agrivi, a digital solution provider for agriculture.

“As a result, farmers have an access to one of the most complex farm management softwares in the world,” Serr says. “The platform brings together the elements related to land and crop management (e.g., mapping of plots and areas cultivated, vegetation indicators and diseases, crop rotation, etc.), with administrative tasks (e.g., centralized register with machinery and workers, inventories, reports etc.)

“With the help of Agrivi solution, the whole agricultural activity can be analyzed in a single interface that gives the farmer full visibility of his land and offers him a good analysis tool to reduce risks and capitalize to the maximum the potential of farm data,” Serr continues.

In the meantime, representatives for Romanian farmers said that even in the face of the generally good dynamics comprising the domestic agriculture and crop protection sectors, the market will face serious challenges in 2022.

Liliana Piron, Executive Director of the League of Romanian Agriculture Producers Associations (LAPAR), said that despite stable growth rates for Romania’s agricultural producers and crop protection sectors, 2021 was a difficult one for both due mainly to the extreme drought that affected the use of pesticides.

“Due to the ban of more and more pesticides on the European market, Romanian farmers are in the position to have access to fewer chemical protection solutions, and some of the available solutions are not that efficient and therefore higher quantities per ha are necessary in order to protect the crops,” Piron says. “But in agreement with the objectives of the Farm to Fork Strategy (part of the European Green Deal), the level of consumption is not expected to grow. The targets of the F2F strategy are to reduce the use of pesticides by 50% by 2030. However, Romania uses approximately 700 grams active substance per ha in comparison with the European average of 2.5 kg or the Hungarian average of 1.5 kg. From this perspective there is still space to grow, but it will hardly happen given the binding targets of the upcoming regulation.”

The rise of the number of agrochemicals that have been banned in the EU remains a big problem for farmers in Romania.

Many banned products have no viable replacements, leaving farmers with limited options. For example, the banning of neonicotinoids as a seed treatment leaves growers with fewer options, which are often more expensive or are not as effective.

With EU regulations taking more active ingredients away from growers, including some popular ones (i.e., tebuconazol, thiophanate-methyl, and chlorothalonil), the market is expected to experience a temporary decline — how big remains to be seen.

The situation is also complicated by the lack of state support for Romanian agrochemical producers, which prevents their more active development and growth.

According to Piron, in contrast to some other EU states, the Romanian crop protection industry is not sponsored by the state, and pesticide producers and distributors are treated like any other private business.

In addition, Prion says, farmers are incentivized to use fewer crop protection products and apply integrated pest management measures instead.

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