Recuperação do Mercado Brasileiro
20 de julho de 2011 Brazil is experiencing a variety of critical issues that are plaguing the country’s agrochemical industry, according to Flavio Hirata, an agronomist and consultant for Allier Brasil.
The country’s unfavorable dollar exchange is negatively affecting the market, and an increase in competition has led to a price drop in many commodities, causing a decrease in profit margins.
The keys to agrochemical market recovery include the continuing global demand increase for commodities such as soybeans, sugar cane and cotton. In addition, expanding arable land will likely contribute to a rebound in Brazil. Pesticide sales have increased 289% between 2000 and 2010, Hirata says.
Brazil’s agriculture industry consists of six main crops: soybean, sugarcane, maize, cotton, citrus and coffee. Of the six, 47.2% of pesticide sales are attributed to soybeans, 11.3% to corn and 8.2% to sugarcane.
Many products have been phased out in recent years including trichlorfon, methamidophos, phosmet, endosulfan and cyhexatin, leaving the industry open to new crop protection products.
There are a variety of reasons why some agrochemical products have failed to thrive in Brazil, including the failure to choose an effective distributor, a lack of understanding of the market, and barriers to entry such as registration issues.
The key to choosing an effective distributor is knowing that for each product, there is a best distributor – but that same distributor is not the best distributor for all products in a line, Hirata says.
New entrants into the Brazilian agrochemical market do not know the market as well or do not want to learn about the market. Strong competition exists in a market where prices and profit margins are falling, which will lead to acquisitions and consolidations in the future.
In addition, regulatory restrictions and biologicals will cause companies to reinvent their business strategies, Hirata says.
— Stefanie A. Toth, Content Editor
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