Brazil agrochemicals sales up by 9% in 2010

Brazil took a step towards securing the title of the world's biggest agrichemicals market by increasing sales by 9% last year to a record $7.2bn, industry data showed.

The rise, reported by Soybean and Corn Advisor, was attributed largely to cheaper prices, weakened by the impact of an appreciating Brazilian real as well as global deflation in some segments, such as generalist glyphosate weedkillers, which faced a glut in supplies.

Growing competition is also seen as keeping prices in check, with 129 companies selling farm sprays double the number five years ago.
More than 98% of farm sprays decreased in price in Brazil last year, the Sao Paolo Institute of Agriculture said.

'Lead the world'

The increase in sales closed the gap between Brazil's agrichemicals market and that of top-ranked America, which looks soon to be demoted to second place permanently, Michael Cordonnier, at Soybean and Corn Advisor, said.

"Brazil is going to lead in world sales," he told Agrimoney.com.

 "Tropical agriculture requires more of these sorts of chemicals that temperate agriculture," largely thanks to a growing need for fungicide applications.

Furthermore, Brazilian farmers, thanks to greater use of double cropping, tend to have a longer growing season, and are expanding the area of land under agriculture.

"Once the US slips from the top spot, it's not going to regain it because future agricultural expansion in the US is going to be limited by the unavailability of additional land resources," Mr Cordonnier said.

Brazil expansion

Brazil will raise its harvested area for corn by 9% to 14m hectares by 2015-16, with corn area expected to rise by 3% to 25m hectares, Abares, Australia's official crop bureau, said last week.

"South America has potential to expand its agricultural areas, particularly in Brazil," Abares said, noting a European Commission forecast the Central West Brazil alone had at least 90m hectares which could be brought into agricultural production.

"Argentina and Brazil now account for just less than half of world soybean trade, roughly equal to the share of the US.

"Further increases in agricultural land for cropping will strengthen the region's role as a major oilseeds export."

Steady US

Cropped area in the US, in contrast, will show a modest decline over the same period, falling from an expected 258.2m acres for 2011-12 to 254.2m acres, the Food and Agricultural Policy Research Institute, at the University of Missouri, said on Monday.

The area harvested for hay will remain steady at 58m-59m acres on top, with a further 30m-31m acres enrolled in conservative programmes.