Jun. 4, 2018
Brazil stands out as one of the largest producers and exporters of grains in the world. In the next year, it is expected to become the world's largest exporter, surpassing the United States.
Even so, Brazil ranks only 5th in terms of arable land (66 million hectares), behind India (179.8 million hectares), the United States (167.8 million hectares), China (165.2 million hectares) and Russia (155.8 million hectares). This area represents only 7.6% of the territory of the country, very low percentage when compared with the European Union that uses between 45% and 65%; United States, 18.3%; China, 17.7%; and India, 60.5%. On the other hand, Brazil has the highest area expansion potential in the world, with more than 190 million hectares.
The use of fertilizers is of fundamental importance for this yield increase, also due to the fact that most of Brazilian soils have acidic pH, which inhibits the absorption of nutrients from the soil by plants. Hence also the importance of the use of acidic correctives such as limestone that increase soil pH and, in addition to providing plant nutrients such as Ca and Mg.
Brazil imports 75% of the fertilizer consumption and is the 4th largest fertilizer consumer behind China, India and the United States. In 2017, fertilizer consumption was 34.439 million tons, up 1% from the previous year, with an average annual growth of 4%, compared to 2% of the global average.
As in the pesticide market, the fertilizer market (NPK) is highly concentrated, where four companies hold 80% of the market.
In the country's largest grain producing region, including soybean, the Cerrado, with more than 25 million hectares of cultivated land, micronutrient deficiency in soils (zinc, copper and manganese) is one of the limiting factors for increasing agricultural yields. Thus the proper use of micronutrients, mainly as in foliar application, becomes a highly efficient tool for grains, cereals as well as for vegetables and fruits.
Unlike the NPK fertilizer and pesticide markets, more than 700 players compete in the segment of crop nutrition which sales in 2017 reached US$ 2.2, a 23% increase over 2016 (based on Real, Brazilian local currency), equivalent to 4.8 million tons, mainly for soybeans, corn, fruits and vegetables.
(1) Foliar fertilizers, organic fertilizers, plant substract, soil remediator
(2) Real, Brazilian local currency
(3) Exchange rate conversion based on annual average dollar quotation
(4) Based on Real (Braziian local currency)
Attractive margins, same distribution channels and same end users, Syngenta, Copfield/Solus, FMC, ADAMA, traditional players of the pesticide industry are entering the plant nutrition sector.
This market, which sales represent more than 20% of the pesticide market; and product registration is at Ministry of Agriculture only, and exempt of any Agency fee charge, is a growing and promising business, according to Mr. Flávio Hirata from AllierBrasil. On May 25th during the 13th Forum AllierBrasil in Hangzhou, China, a detailed presentation about pesticide registration in Brazil showed a high cost and complex process, legal uncertainties and long time for approval - much longer than a foliar fertilizer, that in general is approved in 1 to 2 months.
In order to develop partnership between foreign and Brazilian companies from pesticide, fertilizer and biological industry, AllierBrasil
are organizing the 11th Brazil AgrochemShow
, on August 7th and 8th, in São Paulo, Brazil.