Matthew Phillips at FCI Trade Summit – Miami: Sustained Strength for Crop Protection Ahead
5 August 2013 
Buoyant demand worldwide and adoption of improving technology in developing markets show crop protection is poised to extend its growth streak, industry expert Matthew Phillips said in his keynote presentation at the FCI Trade Summit on Aug. 5. The event kicked off with record attendance of about 550 delegates at the Hyatt Regency in downtown Miami, Florida.
Phillips stressed that it was not only currency fluctuations boosting the market, but higher volumes that fueled a 6.4% rise in crop protection sales in 2012. “It was one of the strongest performances in the global crop protection market since the 1960s,” he said. “We are in a period of sustained growth driven by crop prices.”
Looking ahead, Phillips projected that real growth for crop protection sales, not counting the effects of currency and inflation, is set to rise 2.3% per year through 2017. Helping fuel this trend are growers in major late-stage developing markets – including Ukraine, Russia, Argentina, Mexico and Poland – who are not only using more crop protection products but are also upgrading their technologies, Phillips said.
Brisk fungicide demand is outpacing insecticides and in some cases even herbicides in late-stage developing markets like Ukraine, Russia, Argentina and Mexico. Phillips also highlighted an “explosion in the soybean insecticide market” in the United States driven by aphid pressure. “In Brazil it has even been more spectacular due to Lepidoptera and sucking pests.” Brazil and the United States account for 95% of the soybean insecticide market. He noted that fast uptake of Monsanto’s Intacta Bt soybeans in Brazil may limit the growth market somewhat.
In the near term, the 2013 crop protection market will reflect continued strong farm incomes and improving glyphosate prices, Phillips said. However, weak corn plantings and dropping prices, on top of a sluggish year for wheat and corn in Europe due to wet weather, are likely to temper the otherwise robust environment. USDA forecast last month that world corn stocks in 2013/14 will hit their highest level in 10 years. But Phillips said he was optimistic that corn prices would emerge stronger than the $5.40/bushel level indicated by the futures market.
Late plantings hit the preemergent herbicide and fertilizer markets in the United States this year, but on the other hand, surging insect pressure in the dry Western states and Texas mean a significant uptick for insecticide sales.
Demand for corn – the single largest input sector worldwide and the primary focus of genetically modified traits – has showed no signs of abating: China has said it will triple its grain imports this year, and the ethanol market, which accounts for about 43% of U.S. corn production, has sharply rebounded in the United States.
In Europe, strengthening farm incomes on the back of high wheat prices is expected to boost agrochemical spending in 2014, Phillips added.
Of the Asian markets, “we expect a very positive performance in 2013,” Phillips said. Consumption continues to swell in China, where demand is rising faster than yields are improving. “When you look at the products predominately used, they are older, less advanced chemistries, so there is a clear opportunity for improvement,” he explained.
Seeds will drive yields and growth in the African markets for years to come, as multinationals like Syngenta and DuPont deepen investments. Growth in chemicals will follow, he said. The standout country he has noticed momentum gaining is Zambia, where farmers from Zimbabwe are moving in increasing numbers and exporting crops to much of the Southern Cone.
“There is much growth potential in Africa but it will take a lot of infrastructure work to really realize the opportunity, but it will be led by seed,” Phillips said.
Watch for more highlights from FCI Trade Summit – Miami on www.farmchemicalsinternational.com. Day 2 speakers include Rachel Lattimore, senior vice president, Crop Life America; Svetlana Sinkovskaya, marking director, APK-Inform Media; Fabio Domingues, founder and chair, Vigna Brasil Group; and Rosemarie Rodrigues, regulatory affairs and stewardship head, Syngenta Brasil/CropLife Latin America.
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