AgroPages-Sindiveg projects Brazil agrochemical sales drop by 3% in 2017-Agricultural news

Report

Agricultural Products BRIC (Brazil, Russia, India, China) Industry Guide 2017

By Leonardo Gottems, reporter of AgroPages

Silvia Fagnani
Executive Director of Sindiveg

The Executive Director of the National Union of Crop Protection Producers Industry (Sindiveg), Silvia Fagnani, projects a slight fall of 2 percent to 3 percent in the revenue of the agrochemicals sector in 2017.

According to Fagnani, the factors will be the same that provoked the 1 percent fall registered last year over 2015.

Fagnani pointed out that the drop registered in 2016 was more of an adjustment, characterized by the change in the standard of products sold: “We had a fall, in a certain way, of older products and an increase in our premium products, products to control tough plagues. This issue of fungicide with ready mixtures, newer herbicide, is really an adjustment. There was not a big fall in volume, so it is very balanced.”

The director explained that the factor that will weigh on the performance of the sector this year is the issue of big stocks. “There are a lot of stocks in the field; the infestation of insects is lower and yet there are the credit factors and illegal products that are worrisome. The issue of the dollar we never know.”

She also highlighted the problems of smuggled and fake products being “historic” as Sindiveg has attempted to combat it with campaigns since the beginning of 2000. “They have pressure the revenue significantly, but this had not happened in the year until now. It is a very expressive market, impossible for measuring with accuracy, but it is an issue that worries us a lot,” said Fagnani.

“There are diverse operations launched by authorities, such as the Federal Police, Civil Police, Road Police. We also see several actions of Ibama on properties to guarantee that illegal products are not used. But there is a lack of public policy, because you end up attacking the problem and not its cause. We understand that the penalties should be longer, tougher, there should more control on the border, more communication with neighboring countries to establish quotas to guarantee that the products do not arrive,” pointed out Fagnani.

Commenting on the issue of credit risk, the Sindiveg official explained that the industry of pesticides has already been financing the producer for years. She affirmed that until last year there was a big problem in credit being obtained for farmers, but this difficulty had improved a little bit in 2016.

The defaults, however, are still frequent: “In order to have an idea, the deadline for the receipt [of payment] of the industry in 2014 was 222 days and in 2016 we had 327 days to receive payment. So, the payment term is almost a year for the industry and this number of debts is not renegotiated, that is, if we add the renegotiation, the terms would be longer.”

“For the industry, it is very important to maintain this financing for the producer because we know about the difficulties. It is not in our interest to keep the rates of defaults and not help farmer pay. The sector finances almost 95 percent of the sales,” she concluded.