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Market Insights on Southeast Asian Agriculture
Oct. 27, 2016
Agriculture is the principal economic activity in Southeast Asia. In most of the countries of Southeast Asia, the agriculture sector makes an important contribution to GDP. AgroPages invited some leading agro-companies in this region to help us present a profile of agriculture in major Southeast Asian countries.
Philippines
The Philippines is a country dependent on agriculture, with 13 million hectares of its total 30 million hectare land area devoted to agricultural activity. The total land area used for agriculture is further divided into grain crops, food crops, and non-food crops. Grain crops occupy 31%, food crops occupy 52%, and non-food crops occupy 17% of the total land used for cultivation. The Philippines is a major exporting country for bananas, mango, and pineapple.
Among the grain crops, rice occupies the largest share, followed by corn. The annual production of rice is some 16 million metric tons, which is distributed across the country, mostly into over 2 million small and mid-sized farms. The land dedicated to rice production is extremely fragmented. Growing rice can also be considered, predominantly, a rural profession. In comparison, annual corn production totals some 6.97 million metric tons, making it the dominant crop in the northern and southern parts of the country.
The following table shows the main crop (by annualized planted area) and corresponding insects, diseases and weeds in the Philippines market.
|
Crop
|
Planted area
(000 ha)
|
Key Pests
|
||
|
Insects
|
Diseases
|
Weeds
|
||
|
Rice
|
4,600
|
Green Leafhopper, Stemborer, Black Bug, Rice Bug
|
Bacterial leaf blight, Rice Blast, Neck Rot, Rice tungro disease
|
Echinocloa spp., Leptochloa chinensis, Ischaemum rugusom, Spenochlea zeylanica
|
|
Maize
|
3,200
|
Soil pest (seedling maggots, ants), Corn borer for non-BT corn
|
Downy Mildew, Sheath blight, Corn rust
|
Rottboellia cochinchinensis, Ipomea triloba, Cyperus rotundus, Commelina for non-BT corn
|
|
Mango
|
180
|
Mango Hoppers, Thrips, Cecid Fly, Fruit Fly
|
Anthracnose, Stem-end rot
|
Imperata, Ipomea, Cyperus
|
|
Vegetables
(Upland and Lowland)
|
80
|
Hoppers, Borers, Mites, Aphids
|
Early and Late Blight, Anthracnose, Stem rot, Downy Mildew
|
Perennial Grasses and
Broadleaves
|
|
Banana (Plantation)
|
65
|
Flower Thrips, Mealy bugs, Scale Insects, Aphids
|
Sigatoka, Panama disease, Moko disease
|
Perennial Grasses and
Broadleaves
|
|
Pineapple (Plantation)
|
50
|
Mites, Mealy Bugs
|
Pink Disease
|
Rottboellia, Eleusine, Ageratum, Cyperus
|
The total agrochemical business in 2011 is estimated to be around US$178 million.
|
Agrochemical sales by category in the Philippines
|
Agrochemical consumption per crop type
|
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Plantations are the second-best segment after rice, where agrochemicals have their largest share. While rice is grown in small fragmented farms spread across the country, plantations present a concentrated area as they are located close to each other.
Fruits appear next in the segment with the highest chemical inputs. A number of tropical fruits other than bananas and pineapple, such as mango, papaya, avocado, dragon fruit, durian, and mangosteen, are produced for both the domestic and export markets.
The recent drought, which was greater in severity than the 1997-98 El Niño, has led to greater pesticide and fertilizer inventories being held in the distributors' pipelines over the past year, though drought mitigation measures by the government led to smaller crop losses than originally predicted.
Organic farming and biopesticide usage is poised for significant growth, led by the Department of Agriculture's own drive to promote food safety. Another reason why biopesticides will play a key role in agricultural productivity is the impending new Korean Positive List System slated for implementation starting in 2017, which mandates lower pesticide residue levels for exported crops bound for Korea. As a direct result, banana and other tropical fruit plantations are reexamining their pest and disease control programs.
The agrochemical industry will be stable or reflect an upturn in the next two to three years. This forecast is based on the decision of the Supreme Court declaring unconstitutional the banning of aerial spraying and the lifting of the ban on genetically modified (GM) eggplant research, thus practically clearing away the animosity affecting the fate of GM crops, the BT, and GT corn. These two decisions will have a positive impact on the agrochemical industry.
Another positive development is the change of leadership at the Department of Agriculture, with the primary aim of weeding out corruption in the bureaucracy. The new secretary, although an organic enthusiast, believes in the role of pesticides in the commercial production of crops to feed the logarithmic increase in the population. The new chief of the department has set a target to achieve rice self-sufficiency by 2018 or 2020, at the latest. This means increasing the planted area and productivity through the adoption of modern technology, an integral part of which is the utilization of agricultural inputs.
The Philippines has one of the lowest pesticide usage levels on a per hectare basis among Asian countries, but the need for greater yields will drive the estimated $225-250 million pesticide market to greater growth in the next few years.
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"Sinochem’s focus is to ensure that we satisfy the customer. We devote huge resources in understanding and providing solutions to our different customers. We also value the support that our channel partners provide in guaranteeing the smooth flow of products throughout the market.” |
 |
"The Philippines, with its 100-million-strong population, will still be an important market for agrochemical companies.” |
 |
"Texicon hoped to rebound and capture market share across crops and business segments this year through the building of infrastructure, massive recruitment of field forces, and the rationalization of the distribution system.” |
Malaysia
Agriculture is an important sector in Malaysia. For many years, this sector has been the backbone of Malaysian economy by producing agricultural products for domestic consumption, as the earner of foreign exchange. Agriculture also contributes to the national Gross Domestic products (GDP). It provides major employment for the people, especially from the rural areas. In 2013, this sector employs more than 1.6 million people or 10.9% of the total employment, contributed more than 23% of the total export earnings and adds about 7.2% of Malaysia’s GDP.
Oil Palm remained the No. 1 crop in Malaysia. Palm oil used to be one of the least important edible oils and fats produced and consumed globally, but it has emerged as the most produced and consumed oil in the world (35% of world production in 2014), and it comes from only 6% of the total area planted with oilseeds. This is due to the high per hectare oil yield of the oil palm compared with other oil crops.
|
Crop
|
Planted area
(000 ha)
|
Key Pests
|
||
|
Insects
|
Diseases
|
Weeds
|
||
|
Oil palm
|
5,400
|
Oryctes rhinoceros, Clania tertia
|
Ganoderma
|
Eleusine indica, Paspalum conjugatum, Asystasia intrusa
|
|
Rubber
|
700
|
Coptotermes curvignathus
|
white root, red root, brown root, leaf abscission, black scratched disease
|
Paspalum conjugatum, Eleusine indica, Clidemia Hirta
|
|
Rice
|
700
|
Nilaparvata lugens, Oebalus pugnax, stem borers, Cnaphalocrocis medinalis
|
Pyricularia oryzae, Rhizoctonia solani
|
Echinochloa crus galli, Leptochloa chinensis, Ischaemum rugosum.
|
|
Fruits
|
250
|
Borers, mealy bugs, fruit flies, mites
|
Phytopthora sp.,
Pythium sp.
|
Eleusine indica, Digitaria longiflora, Cynodon dactylon.
|
|
Vegetables
|
55
|
Plutella xylostella, Thrips palmi, Spodoptera litura
|
Pythium sp., Colletotrichum sp., Erysiphales
|
Eleusine indica
|
The most common major weeds are grasses, broadleaved weeds, and sedges. In recent years, the emergence of new broadleaved weeds, Parthenium species, grassweed, and Eleusine species have caused more problems and challenges for the farmers, mainly due to glyphosate resistance.
Insect pests such as borers, leaf eaters, mites, and biting and sucking insects are the targeted pests to control here.
The ‘Ganoderma’ disease is the greatest challenge for oil palm plantations in Malaysia and Indonesia, as they cause basal stem rot and bud rot disease. These diseases are very difficult to cure. If a palm is infected, most likely the whole plantation will get affected. The root cause may be the soil condition.
Malaysia’s agrochemical market is relatively small compared to its neighboring countries, such as Indonesia, Thailand, and Vietnam. It is highly competitive and already very well served by established players.
Locally, climate change and extreme weather patterns have been seen affecting cropping cycles and agrochemical usage. This, coupled with depressed global commodity prices and the local implementation of Goods and Services Tax, has somewhat impacted Malaysia’s agrochemical market over the last two years.
As the world’s second-largest palm oil producer and the fourth-largest producer of rubber, agriculture will continue to play a key role in Malaysia’s economy. In addition, Malaysia is targeting 100% self-sufficiency in rice production in 2020, which means that yield per hectare has to increase by more than 15%. Growers will demand high quality and more efficient agriculture inputs and that includes agrochemicals. There will also be pockets of opportunities in automation and technology such as smart equipment, sensors, and analytics.
 |
“Hextar Group's management, structure, knowledge, and resources are the fundamental, primary reasons for Hextar's continued international growth. This, along with structured business planning, will be the platform for which Hextar's brand will be known and respected in more international territories over the coming years.” |
 |
“Farmcochem is one of the major manufacturers and exporters of agrochemicals in Malaysia. For the past 32 years, our people have focused on leveraging innovation and technical know-how to deliver trusted crop protection products to help growers cultivate and harvest high-quality crops and increase productivity.” |
Thailand
Agriculture has always been a backbone of Thailand’s economic foundation. The agriculture sector employs 39% of the work force and is estimated at 12% of GDP. Agricultural production is the main source of national income.
The soil and climatic condition allow Thailand crops to be cultivated in a large range, crops that originate in the temperate, tropical and semitropical zones. Main crops grown in Thailand are: rice, cassava, beans, maize, cotton, yams, sugarcane, potatoes as well as different oilseeds. Thailand is the No.1 exporter of rice and cassava products in the world.
|
Crop
|
Harvested area in 2013
(000 ha)
|
Key Pests
|
||
|
Insects
|
Diseases
|
Weeds
|
||
|
Rice
|
12,373
|
Brown plant hopper, Stemborrer, Leaf folder
|
Brow spot disease, Rice blast, Sheath blight
|
Echinochloa crus-galli, Echinochloa colonum, Sphenoclea zeylanica, Cyperus iria
|
|
Rubber
|
2,421
|
Bark beetle, Scale insect
|
Powdery mildew, Anthracnose
|
-
|
|
Cassava
|
1,385
|
Whiteflies, mealy bugs, brown plant hopper
|
Bacterial blight
|
-
|
|
Sugarcane
|
1,321
|
early shoot borer, Scale insect
|
White leaf disease
|
Crabgrass, barnyardgrass
|
|
Maize
|
1,146
|
stem borer
|
Downy mildew, rust
|
Crabgrass, barnyardgrass
|
Thailand is among the top 5 food exporters in the world. Not only is the country one of the world’s major suppliers of agriculture commodities, it have among the most advanced food processing industries in Southeast Asia which has capitalized on bringing value-added products to Europe, Japan, China, and US markets. Thailand has developed from an exporter of raw materials such as rice, rubber, polymers and oil; to become a contender in the value-added agro-business, exporting to markets in Asia, Europe, and North America.
The severe drought continued from 2014 prevented planting in Thailand, due to shortage of irrigated water. The government canceled subsidy scheme for rice and farmers have limited cash to buy agri-input products. The value of rice pesticide dropped over 40% of annual sale.
Thailand has big change of DOA registration regulation. It is a big impact to pesticide business in Thailand. Until now, in the part, Thailand has 26,000 registered pesticide products. From year 2012 to Aug 2016, Thailand had got 9,000 register updates, and still 4,000 registers remain on the queue of submission process. Thailand is a high competitive market for pesticide business.
 |
"We were one of the top 10 Thai agrochemical companies in the year 2015, we have been in this business for 35 years. Our strong performance is based on the quality of formulated products created with our own technology, competitive cost of formulation, and our focus on technical marketing instead of sales." |
Cambodia
Cambodia is influenced by the monsoon climate, which consists of two seasons: dry season (November – April) and wet season (May – October). The last decade was golden for Cambodian agriculture. The annual agricultural sector growth of 5.3% between 2004 and 2012 was one of the highest in the world, according to a new World Bank report.
Cambodia is rich in bio-diversity and accordingly, agricultural crops are diversified. With the introduction of modern agriculture in the early `60s, traditional crop varieties were replaced by modern crop varieties (MCVs). These high inputs which are responsive to MCVs brought a significant change in Cambodia’s agriculture. In due course, pest dynamics has also changed and a number of pest outbreaks occurred frequently. To overcome these problems, use of chemical pesticides also became frequent.Cambodia’s pesticide market has continued to expand over the last decade, which is basically a result of the liberalization of Cambodia’s economy. Cambodia has no pesticide manufacturing capacity of its own, and most available pesticides are imported officially and illegally from neighboring countries such as Thailand and Vietnam. Some of the most popular pesticides, such as the organophosphates methyl parathion and Mevinphos are extremely hazardous and are banned according to Cambodian law.
The use of insecticides is increasing in Cambodia. Vegetable production requires higher use of pesticides; the proportion of users topped at nine out of ten farmers. For maize and rice, the number of users also increased but at a lower magnitude: one-third of respondents used insecticides.
The use of herbicides is also increasing, especially for upland crops. Cassava and maize farmers were the most prominent users of herbicides. Weed infestation was a major constraint in large-scale upland production; with the increasing difficulty in finding rural workers and the increase in cultivated land areas, farmers tended to use herbicides.
Future agricultural growth at its past speed and further structural transformation are possible in Cambodia. A slower growth cannot become a new normal. More attention to sustainability, the quality of public services, an enabling policy environment, and implementation would turn these possibilities into reality. It is worth well trying.
 |
“SAL Biosciences, together with its local partners, joins many organizations, such as rice association and Kampot Pepper Association. We are committed to researching characteristics of crops and improving farming practices. For example, when Kampot Pepper root rot outbroke in north Cambodia, SAL worked with farmers and dealers to study the causes of disease and find solutions.” |
Indonesia
With its vast and abundant fertile soils Indonesia is a major global key producer of a wide variety of agricultural tropical products, and although agriculture's share of the country's gross domestic product (GDP) has declined markedly during the last five decades, it still provides income for the majority of Indonesian households today. In 2012 this sector employed around 49 million Indonesian individuals, which represents 41 percent of the total Indonesian labour force.
The agricultural sector of Indonesia comprises large plantations (both state-owned and private) and smallholder production modes. The large plantations tend to focus on commodities which are important export products (palm oil and rubber), while the smallhold farmers focus on rice, soybeans, corn, fruits and vegetables.The Indonesian pesticides market is estimated to grow at a CAGR of 8% in 2011-2018 period. The market value estimated during 2013 was Rp 800 billion and it is expected that the value will reach to Rp 1,176 billion by 2018.
In Indonesia, the agrochemicals industry has been witnessing a relatively steady to high growth, which has been primarily attributed to advancements in the pesticides and fertilizer industries. While the prevalence of chemical or synthetic based agrochemicals application in agricultural land would continue, human, animal and environmental health concerns would play key roles in driving growth for safer products like plant growth regulators. Specific major drivers for the agrochemicals industry include growing demand for food safety and quality, need for increased land productivity and adoption of new farming practices. On the negative side, restraints limiting market growth include environmental and regulatory constraints pertaining agrochemical usages and popularity of natural products.
 |
"Indonesia’s pesticide market has been dominated by products of multinational companies, which control about 60 percent of the market. In the future, it’s expected that local products could grab about 60 percent of the market." |
Source: AgroNews
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