By Leonardo Gottems, Reporter for Agropages
The sales of Brazilian pesticides are expected to exceed US$11.5 billion this year, according to the latest report on the “Outlook for Brazilian Agribusiness 2020”, produced and released by Rabobank.
If this projection holds true, the agrochemical sector's revenue performance would increase by 11% compared to 2018, pointed out Rabobank.
According to the international financial institution specialized in agribusiness, some factors have benefited from the expansion in the sector. The first factor is the demand, which grew in Brazil, driven mainly by soybean cultivation, the main one in the South American country.
In addition, the agrochemicals sector has been benefiting from higher prices of inputs. According to Conab (National Supply Company), if we consider only the prices measured in the 3rd quarter of 2019 in the state of Mato Grosso, Brazil's largest soybean producer, pesticides appreciated on average at 8% compared to the previous year.
Rabobank projects that for 2020, the demand for inputs should be underpinned by the positive scenario for agricultural commodity prices. “There are also some questions related to China. The reduction in production due to environmental adjustments has been offset by the policy of zero consumption growth,” the institution stated in its report.
“As for pesticides, maintaining production in China at low levels continues to be the main factor supporting international prices. Throughout 2019, however, declining Chinese demand, as well as increased production in other countries have contained more significant increases in dollar prices. In the domestic market, the positive scenario for agricultural commodities should contribute to the improved growth in the demand for inputs in the 2020/21 crop cycle,” concluded Rabobank.