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The market for biologicals is undergoing a major transformation in Latin America’s largest economy. What is role can fungi bioproducts play in the industry?
The biologicals market in context
Brazil is currently the largest market for the use of phytosanitary products for crop protection in the world. Sales of biologicals have been growing at a rapid pace in the country, with an interannual growth rate of 38% in US dollars in the last half decade.
In the 22-23 season, figures provided by the consulting firm, Kynetec, showed that the biologicals market reached US$827 million, with a predominance for bioinsecticides and bionematicides. These products have been a complementary tool to the action of chemicals, mainly in the management of nematodes in soybean cultivation and the control of Cigarrinha do Milho (Dalbulus maidis) in corn.
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The market intelligence consultancy, Blink, estimates that the total market will reach US$2 billion in the 2026-27 season. These predictions are based on the intention of farmers to continue adopting biological technologies, the expansion of cultivated land in the country, and the growth in the number of products used in the same application. The increase in the market will promote the arrival of new companies to the market, which Blink advised could put pressure on sales prices current margins.
This promising context of the use of biologicals for agriculture is also reflected in registration numbers. According to Brazilian agency FAPESP*, biological products have for the first time surpassed traditional chemical pesticides in total product registrations for pest control. In the case of sugarcane, 90% of products registered for pest control come from products, such as microorganisms, biochemicals and semiochemicals. In Brazil, 55% of farmers have adopted biological technologies, as opposed to just 6% in the United States.
Inoculants and new opportunities
Blink also stressed that 15% of the total biologicals market in the 22-23 season comprised of inoculants. When we specifically analyzed the legislation on these microbial products, we found that they fall within three distinct categories, depending on the type of microorganism, behavior, and functionality:
• Biological fixers of Nitrogen in legumes: In this group are Nitrogen-fixing bacteria that carry out symbiosis with crops in the legume family. Bradyrhizobium Sp products are the most widespread example in the market, having reached 80% of the soybean cultivated area.
• Associative bacteria: These are free-living bacteria that do not have an internal symbiosis but live in the rhizosphere interacting with plants. In this group are the Azospirillum Sp bacteria, which are used in more than 30% of soybean production.
• Growth promoting microorganisms: In this group are all microorganisms, either bacteria or fungi, deployed to promote plant growth or solubilize nutrients.
In this last group, we see great opportunities for the introduction of new fungal-based biological assets.
Currently, fungi still have a very low prevalence in the biologicals market. Of a total of 657 registered inoculants, only thirteen products have fungi as their active ingredient, the remaining being bacterial-based. The thirteen registered fungi- based products belong to the genera Trichoderma, Claroideoglomus, Rhizoglomus and Rhizophagus.
According to these statistics there is a future that is still unexplored by the industry, where fungi could contribute a bigger role in the segment of inoculants, biofertilizers, and nutrient solubilizers. With more than 120,000 described species, the fungi kingdom could have more than 1.5 million different species. With its known potential to produce biologically active metabolites, fungi are primed to carve new market niches, potentially even beyond agriculture.
With regard to its application in the realm of agriculture, the promises seen particularly in the arbuscular mycorrhizae are a great case study on how these microorganisms can offer a series of significant benefits to plants, especially in terms of nutrition and resistance to stress.
According to Marschner and Dell (1994), the external hypha of the arbuscular mycorrhizal fungus can provide a considerable amount of nutrients to plants, including up to 80% of phosphorus needs, 25% of nitrogen, 10% of potassium, 25% of zinc and 60% of copper. Furthermore, symbiosis with these fungi can also help protect plants against salt stress, as observed in studies carried out by Giri and collaborators (2002).
Research carried out by Augé (2001) highlighted the importance of arbuscular mycorrhizae in mitigating water stress in plants. This exhaustive review included 147 scientific studies published up to 1999, which demonstrated the benefits of these mycorrhizae under conditions of drought or water stress. Although whether this benefit was related to the greater absorption of phosphorus or other nutrients was initially discussed, it is undeniable, and the symbiosis can alter the water balance of plants independently of the acquisition of phosphorus in certain circumstances, the author stated. Of the 147 studies reviewed, 55 empirically demonstrated that increased drought resistance in plants colonized by mycorrhizal fungi occurs independently of the increase in phosphorus uptake capacity, another agronomic benefit provided by this symbiotic relationship.
When comparing plants inoculated with mycorrhizae to non-inoculated populations under drought conditions, several significant differences are observed. For example, inoculated plants tend to have greater stomatal sensitivity to humidity, which is reflected in greater stomatal conductance. They also exhibit a higher photosynthetic rate due to a prolonged stomatal opening period, as well as greater efficiency in water use and carbon assimilation. Furthermore, they show greater enzymatic activity and a lower amount of abscisic acid in the xylem, which contributes to a lower rate of leaf abscission and other signs of foliar stress, as demonstrated by various studies, such as Augé (2001) and Simpson and Daft (1990).
The effects of these microorganisms are nothing new, they have been known since Albert Bernhard Frank described them in 1885. The novelty of this topic is the method of manufacturing mycorrhizae since it is a biotrophic fungus that can only multiply in a living host. Recently, companies that have evolved the traditional production system now manage to produce at low cost and achieve high quality spores. The spores' compact size allows them to be highly effective and resistant to environmental stress.
Biodefensives: A path forward
In light of newly enacted regulations by Brazilian government, we turned to Dr Rose Rodrigues, a Brazil and Latam market veteran of 35 years and director of SRI’s (Soluções Regulatórias Integradas), a Brazilian boutique consultancy specialized in biological and chemical product registration, to better understand the landscape.
Rodrigues explained the new act recognizes that new technologies require the adoption of new procedures specially crafted for the following categories: live microorganism, live microorganism and metabolites or metabolites only. The regulations also include guidance on GMO organisms or products derived from GMOs.
″Biologicals continue to be a government priority, with the average approval timeline of 1 year after submission, or even faster approvals if organic agriculture is in scope,″ Dr. Rodrigues said.
SRI has recently partnered with Gaia Agrosolutions to generate cost and time-effective solutions for the technical and commercial development of new technologies for the agrobusiness market. Gaia’s director, Matias Santipolo, whose credentials include more than 10 years in the segment in the Latin American market, believes that a favorable, opportunity-rich scenario is afoot in Brazil, particularly in the face of these new regulations.
″There will be a great paradigm shift in the biocontrol market,″ Santipolo asserted. ″Until now, companies differentiated their products in the field by biological asset and its concentration. These changes in the law can be used by companies to set themselves apart. Fungi, with its known potential to produce biologically active metabolites, is primed for the introduction of innovative solutions to the market,″ he added.
Both executives agree these conditions offer great opportunities for companies seeking to enter the Brazilian market and innovate.
One possible avenue are products combining metabolites and living organisms, ″which can now be registered under the new framework″, according to Dr. Rodrigues. A suggested approach for such innovation is fermenting fungi in a liquid medium to deliver products not only with fungal biomass, but also biologically active metabolites, as opposed to solid fermentation where outputs are highly concentrated in fungal biomass but low in bioactive metabolites.
The key lies on the industrial process, which is as important as the genetics of the selected fungi, Santipolo argued.
″In the industrial process, we can activate or silence fungal genes,″ he explained.
A conceptual, simplified scenario offered by Santipolo can illustrate how important production processes can be to the success of a biological product.
″Let's think of a fungal microorganism that genetically has the skills and gene load to control foliar diseases and control nematodes. The effectiveness of this final product will only depend on how it is produced in the industrial process. When we need this strain to be a bionematicide, the industrial process will have to focus on producing fungal biomass, because the nematicide is applied directly to the seed so that the hyphae can grow alongside the root of the plant to protect it,″ Santipolo described.
″On the other hand, if the same fungi, which we already established also has all the genetic capabilities to control foliar diseases, does not undergo a proper industrial process to produce active metabolites in addition to the biomass, chances are the product will have very low field efficiency for disease control or be highly variable.″
With farmers adopting these technologies more readily than their counterparts in other countries and a new legal framework, Brazil is moving towards a major revolution in the pesticide industry, food quality and environmental footprint.
Reference:
*( https://agencia.fapesp.br/registro-de-produtos-para-controle-biologico-de-pragas-ultrapassa-o-de-agroquimicos-no-brasil/51431 )
**PORTARIA CONJUNTA SDA/MAPA - IBAMA - ANVISA Nº 1, DE 10 DE ABRIL DE 2023
https://www.infoteca.cnptia.embrapa.br/bitstream/doc/276480/1/DOC156.pdf
This article is published in AgroPages' Annual business publication - <2024 CROs & CRAOs Manual>.
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