Brazil pesticide sales rise as dollar strengthens

Sales of agrochemicals in Brazil reached a record 6.7 million reais ($2.85 million) in the first half of 2013, up 30 percent from a year ago after record soy and corn crops left farmers well funded and a strengthening dollar encouraged early sales.

Farmers usually purchase pesticides in the second half of the year, but producers made purchases of supplies that are imported and priced in dollars earlier this season as they watched the local currency weaken, the director of Brazil's Andef plant defense association recently said.

The strong dollar benefits farmers who produce and sell commodities with prices indexed in dollars like soy and corn. It can also raise the costs of raw materials like fertilizers, seeds and pesticides.

"This market has a love hate relationship with the exchange rate," Daher said in Thomson Reuter's Trading Brazil chat room.

He said farmers are bartering such inputs for soybeans and corn to limit the effect of a volatile exchange rate this season.

Farmers are well capitalized after selling a record 81.5 million tonne crop at high prices last season and are expected to expand area planted with soybeans slightly more when sowing starts in September or October.

An attack by moths in soy crops last year has also encouraged farmers, who have traditionally worried more about fungi, to buy more insecticide, Daher said.
Andef represents 13 international companies that sell pesticides in Brazil.