The combination of aggressive planting of GMsoybean, possible increase in planting area of soybean in the 2012/13 growing season, the start of new growing season in Brazil and rising glyphosate price in China will stimulate the demand for glyphosate and in turn boost the price of glyphosate. according to CCM’s August issue of South America Crop Protection Monthly Report.
The price of glyphosate has been close to the highest level in 2012. According to the Comision de Abastecimiento, the market price of glyphosate has increased from USD3.80 per litre in May to USD3.82 per litre in July 2012 in Brazil, close to the highest level of USD3.85 per litre in Feb. 2012.
The price of glyphosate increases thanks to strong demand in Brazil and rising glyphosate price in China.
Firstly, the aggressive planting of GM soybean leads to increasing demand for glyphosate in Brazil. Brazil is one of the biggest agriculture producers in the world, and is also a genetically modified crop production country. In Brazil, almost 80% of soybeans are GM soybeans. Most of local farmers choose to plant Roundup Ready soybean which was developed by Monsanto. This soybean has a feature that makes it tolerant to glyphosate-based herbicides which are used for drying and post-planting and are known for their efficiency in controlling all types of weeds. Roundup Ready soybean can not only reduce the production cost, but also increase the soybean yield. From 2000 to now, more and more Roundup Ready soybean has been planted in Brazil, which leads to greater demand for glyphosate from local farmers.
Secondly, the possible increase in planting area of soybean in Brazil will boost the demand for glyphosate, thus pushing up the price of glyphosate. In 2011/12,the production of soybean in Brazil was 65.5 million tonnes, down 13% from 75.5 million tonnes in 2010/11. But the export volume in the first five months of 2012 was 18% higher than that in the same period of 2011. According to a report released by USDA in Aug. 2012, the export volume of soybean in Brazil will reach 36.7 million tonnes in 2012/13. In addition, more than 90% of soybean crop harvested in 2011/12 has already been sold. In this context, the Brazilian farmers will plan to grow more soybeans in the coming season, and the production of soybean in Brazil will increase in response in 2012/13. USDA estimates that Brazil will increase the soybean acreage by 6% to 26.5 million ha. in 2012/13 and the production of soybean will reach 81 million tonnes compared to 65.5 million tonnes in 2011/12.
Thirdly, the start of new growing season of soybean will increase the demand for glyphosate. With the 90- day soybean free period ending, farmers in the central region of Brazil are allowed to start planting soybean in Sept, and they need more herbicides such as glyphosate for weed control.
Fourthly, the increasing price of glyphosate in China will also be likely to push up glyphosate price in Brazil in the future. Chinese producers play an important role in the international glyphosate market. According to CCM International, almost 56.1% of global glyphosate was produced in China in 2010. Brazil is the third top importer of glyphosate from China, behind Argentina and the US, and many glyphosates consumed in Brazil come from China. Meanwhile, the price of glyphosate in China has increased since June 2012, and the exworks price of 95% glyphosate technical has risen from USD4,114/t in June to USD4,464/t in Aug. In addition, glyphosate price will also continue to rise in the future in China. Therefore, glyphosate price in Brazil will be driven up by the rising price of glyphosate in China.
The greater demand for glyphosate will likely increase the need for other herbicides such as paraquat and diuron. The excessive use of glyphosate causes the emergence of glyphosate-resistant weeds. The farmers need to use other herbicides to control weeds, which will bring the opportunity to other herbicides and help increase their prices.
Source: South America Crop Protection Monthly Report 1208
http://www.cnchemicals.com/Newsletter/NewsletterDetail_256.html
Content of South America Crop Protection Monthly Report 1208：
Debate on Peruvian agricultural means of production import enlargement arises
Land degradation reduces yield of crops in Bolivia
Glyphosate price will increase gradually in Brazil
Argentina signs a potash agreement with Vale
Uruguay increases variety of GM crops to be registered
MAPA encourages use of biopesticide
IBAMA to re-evaluate four neonicotinoid insecticides
Commercial launch of 4 GM corns to be approved in Paraguay
BASF builds new technology center for seed treatment in Brazil
Arysta LifeScience optimistic about clethodim market
Uruguayan rice harvest decreases in 2011/12
Brazilian white mold prevention becomes important for soybean planting
Planting area of soybean to break record in Mercosur
South America Crop Protection Monthly Report , a monthly publication issued by CCM International on 31th of every month, offers timely update and close follow-up of South America's Crop Protection industry dynamics, analyzes market data and finds out factors influencing market development.
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