April 1, 2011

Ag Chemical Sales in Brazil Expected to Increase Again in 2011

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Agricultural chemical sales in Brazil in 2010 totaled US$ 7.3 billion and sales are expected to increase once again in 2011 according to the director of the National Association of Plant Protection (Andef). Officials at Andef feel that sales could increase as much as 15% in 2011. The Minister of Agriculture has a much more conservative estimate indicating that agricultural chemical sales will increase only 4.4% in 2011, which by the way is the amount that the Grosso Domestic Product is projected to increase in 2011.

The primary reason for the optimism concerning future sakes is of course the current strong prices for soybeans, corn, cotton, and sugar. Strong prices are expected to continue in 2011 which will encourage acreage expansion of all these crops. Additionally, when commodity prices are strong, farmers are more willing to spend the resources necessary to insure maximum production.

Brazil is the second largest consumer of agricultural chemicals after the United States. Farmers in the United States plant more total crop acres, but farmers in Brazil plant two or sometimes even three crops per year on the same acreage.

Eighty percent of all the agricultural chemicals used in Brazil are used on the four major row crops in Brazil. The remainder is used on tree and fruit crops, horticultural crops, and forestry. Of all the agricultural chemical sales in Brazil in 2010, 46% were used on soybeans, 11% on sugarcane, 10% on corn, and 10% on cotton. Producers in the state of Mato Grosso purchased 20% of the total, Parana 15%, Sao Paulo 14%, Rio Grande do Sul 11%, Goias 10%, and Minas Gerais 9%.