Andav Congress 2023: Market is still turbulent for input distributors

Date:08-18-2023

Input distributors operating in Brazil managed to overcome the worst moment of the COVID-19 pandemic, but the consequences will still cause turbulence in the months ahead.

This was one of the conclusions reached by the participants of the Andav 2023 Congress, which had the participation of AgroPages.

According to the main speakers at the event, the scenario tends to normalize only next year, with greater inventory balance, increased sales, and recovery of profit margins.

Even with many mergers and acquisitions in the Brazilian market of resellers of inputs in recent years, there are still around 7,200 companies in the segment, according to data from the National Association of Distributors of Agricultural and Veterinary Inputs (Andav).

As the dispersion remains high, specialists claim that the tendency is for the movement of acquisitions to regain strength as the scenario normalizes.

″In the same way that we indicate consolidation as a trend, it is also possible to state that there is a market for everyone (…)″ said Paulo Tiburcio, president of Andav, representing more than 2,700 companies.

With 215 distributors in Brazil, Colombia and Uruguay, Lavoro Agro, controlled by Pátria Investimentos, saw results deteriorate between January and March 2023.

From January to March, the company's consolidated sales fell 2.6% compared to the same period last year, to US$ 486 million.

″We are in a moment of transition. We had three or four years of rising agricultural commodities, and are experiencing a cycle of lower prices. But there will be no reduction in the planted area, and the sales volume of inputs will grow,″ said Ruy Cunha, CEO of Lavoro.

According to him, the sales channels come from a high level of inventories, formed under the fear that there would be a lack of products.

"Our business model is unique, and we will continue to grow," said Cunha, recalling that sales of the group's biological products division, Crop Care, continue to double every year.

Alberto Araújo, president of Belagrícola, controlled by the Chinese Pengdu, believes that the market will return to normal only next year.

″The volatility in the grain market is still very pronounced, which affects both the pace of commercialization by producers and sales of inputs for the 2023/24 harvest,″ said Araújo.

(Editing by Leonardo Gottems, reporter for AgroPages)