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Agrochemicals Market in Brazil
Frost & Sullivan, Aug 2010, Pages: 92
This research service analyses the Brazilian agricultural chemicals market. The market is divided into two major segments, namely: crop protection chemical and fertilizer chemicals. The total agrochemicals market is in the mature stage and it is simultaneously suitable to innovations. Then, it is expected to experience consistent growth in the future. The fertilizers segment is considered to be in a more advanced stage of market development, since the technologies for crop protection are still suffering considerable changes in Brazil.
This research service titled Agrochemicals Market in Brazil analyzes the impact of the economic recession on the agricultural sector in Brazil and provides key recommendations for participants in this space. In this research, Frost & Sullivan’s expert analysts thoroughly examine the fertilizers and crop protection chemicals segments.
Market Overview
Domestic and International Demand for Agricultural Products Spurs Growth in the Agrochemicals Market in Brazil
Stoked by local and international demand, the agrochemicals market in Brazil is witnessing consistent growth. The agrochemicals market in Brazil was not impacted by the global economic downturn in the same way as other markets due to the consistent and sustainable demand for food The total Brazilian agrochemicals market, which was worth $19.00 billion in 2009, has been driven primarily by the sustained demand for agrochemicals, especially in cultures such as soybean and corn. Currently, Brazil is the third major exporter of agricultural products. There is an increasing pressure on farmers to expand crop yields to meet escalating demand from the burgeoning local as well as international population. “With the high demand for food, the country is likely to become the leading exporter of agricultural products, as it is one of the few countries that have potential areas for cultivation expansion,” notes the analyst of this research service. “Better productivity and conversion of unused land for agricultural use can help meet the demand upswing.” Being a mature market, the pace of growth has been slow; however, the market is expected to gain momentum within the next five years. The total market accounted for 6.5 percent of the gross domestic product (GDP) in 2009, and it employs approximately 20 percent of the country's workforce. Owing to the social programs unleashed by the Brazilian Government and fast-paced economic development, the gap between the middle and low classes is narrowing. With better accessibility to basic goods, food consumption has been increasing. This new consumption pattern is poised to drive the demand for food, and consequently, the demand for agrochemicals.
Although the market for agrochemicals is witnessing growth in Brazil, the local supply of raw materials and intermediate products is not sufficient. In 2009, more than 50 percent of raw materials and intermediate products for agrochemicals production were imported. Natural resources are available for a few companies, which results in a highly concentrated supply side. Import duties and high transportation costs have forced manufacturers to hike prices, leading to reduced competitiveness.
In the total Brazilian agrochemicals market, opportunities abound in all levels of the value chain. Logistics and transportation are the key areas that demand improvements to increase the level of competitiveness in the market. Considering that the market in Brazil is mature, improved and more efficient processes are crucial to maintain competitiveness. “Companies that can provide solutions to improve the logistical issues in Brazil are likely to have the cutting edge in the total agrochemicals market,” says the analyst. “In addition, innovative companies and manufacturers that can develop cost-effective solutions are expected to become the leading participants, as the market is highly price sensitive.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Fertilizers
- Crop protection chemicals
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