With the increasing price of agricultural commodities in recent years, Latin America becomes more and more important for the supply of agricultural commodities such as soybean and corn in the world, as the region has greater potential for agricultural land than most other regions in the world, according to CCM’s monthly report, Crop Protection South America Monthly Report issued in February.
The fast development of agricultural production in the region becomes the rigid support for the seed and pesticide market, where witnessed an increase in both volume and price. In 2012, the tycoons, such as Monsanto, Syngenta and DuPont, all achieved good performance in the region, which boosted the whole business of them.
Monsanto
According to Monsanto's 2012 annual report (the year ended Aug. 31, 2012), net sales of corn seed and traits increased by 21% in 2012, with the sales improving primarily in the US, Latin America and Europe. The increases in these regions were primarily driven by higher volumes due to an increase in planted area and stronger customer demand.
Net sales of corn seed and traits also improved because of increased trait penetration in Brazil. Monsanto is upgrading its corn product mix in Brazil from single stack to double stacks, which would increase the company's profit greatly, as price of double stacks is much higher than the single stack.
Soybean seed and traits net sales also achieved good performance in 2012 primarily because of product mix and pricing increases in the US and increased penetration in Brazil. The company upgraded its soybean mix from the first-generation Roundup Ready soybeans to Intacta RR2 Pro soybeans.
The higher price of Roundup and its strong demand from countries such as Brazil also contributed a lot to the company's 2012 performance. In 2012, the price of Roundup has witnessed a remarkable increase following the trend of generic glyphosate.
An ever-expanding Latin America corn business continued to boost Q1 2013 results for Monsanto. Brazil and Argentina were key catalysts for Monsanto's corn seeds and traits business which sharply outperformed its other biotech segments.
In Q1 2013, net sales of corn seed and traits jumped to USD1.14 billion from USD895 million in the same period of 2012, while net profit of corn business climbed to USD686 million from USD531 million.
In Brazil, farmers continue to upgrade corn products from single trait to double stack, VT PRO2. VT PRO 2 is the second-highest volume trait in the company's Brazil corn portfolio in 2013.
In Argentina, the company has seen strong adoption of its Genuity VT Triple PRO product. The triple-stack corn product is on track to be 40% of its Argentine corn portfolio in its second year on the market.
"In this record year for our pipeline, we added next-generation agronomic trait solutions, advanced our work in the unique space of yield and stress with the launch of Genuity DroughtGard Hybrids, advanced breeding projects that combat yield-reducing pests and diseases, and also added projects in our newest area, agricultural biologicals," said Robb Fraley, Monsanto chief technology officer.
Syngenta
Syngenta, the world's largest agrochemicals maker, posted a 17% jump in profit in 2012, as adverse weather that pushed commodity prices higher led growers to invest more heavily in crop protection. Sales in North and Latin America outperformed other regions.
In 2012, sales in its crop protection business soared by 19% in North America and by 12% in Latin America. Sales in Europe, Africa and the Middle East fell by 2%, while that in Asia Pacific decreased by 5%.
According to the company, adoption of Dual/Bicep products on sugar cane in Brazil is accelerating rapidly. Besides, boosted by Gramoxone in Latin America and the US, non-selective herbicide growth was 12%, totaling USD1.25 billion for the year. Seed care increased by 9% to USD1.11 billion on growth in Cruiser and Celest/Maxim seed treatments. Emerging markets showed more than 20% sales gains.
To seize the fast growing seed market in the region, Syngenta plans to invest USD77 million in the expansion of its corn seed production facility in Formosa, Brazil. Annual capacity will be quadrupled to 1.6 million bags by 2015. Spurred by growth in the pork and poultry sectors, the value of Brazil's corn seed market is expected to reach USD2.7 billion by 2020 with increased second season production and greater technology adoption.
DuPont
In 4Q 2012, sales of DuPont's agriculture segment, including crop protection and seed business, were up 18.4% to USD1,535 million compared with the same period of 2011. The company stated that increase of sales was mainly driven by volume and pricing growth for seed and crop protection businesses in North America and Latin America. Sale volumes were up by 11% and prices up by 7% despite the negative impact of currency.
For full year of 2012, sales of agriculture segment rose by 13.7% to USD10,426 million and the pre-tax operating income (excluding significant items) was up by 17.8% to USD2,063 million. Pioneer seed sales increased thanks to higher global volume and pricing gains in corn and soybeans. Crop Protection sales grew on strong demand for insecticides and herbicides in all regions.
Dow AgroSciences
For the full year of 2012 ended Dec. 31, sales of Dow AgroSciences' agricultural sciences segment increased by 12.9% to USD6,382 million, driven by increased customer adoption of new products and healthy industry fundamentals.
Seeds, traits and oils reported a 44% sales gain in Q4 2012 compared with the same period of 2011, driven by continued strong growth in both North America and Latin America. For the full year, this segment's sales increased by 27%, with significant increases in key crops, including corn, soybeans and healthy oils. Strong farmer demand fueled gains in SmartStax® corn hybrids.
BASF and Bayer CropScience
BASF and Bayer CropScience, two German companies, also achieved good sales performance in the region. BASF's agricultural solutions segment sales increased significantly by 11% in the third quarter of 2012 driven by successful start to the season in South America and fall business in the Northern Hemisphere.
BASF improved sales in South America thanks to a very good start to the season. Demand was high for insecticides based on the active ingredient fipronil and for the fungicide F 500®.
Bayer CropScience's crop protection business grew by 17.8% in the third quarter of 2012. Sales growth was especially brisk in Europe and North America, but business also expanded by an encouraging double-digit percentage in Latin America/Africa/Middle East.
Sales in the Latin America/Africa/Middle East region increased by 10.5%. Growth was mainly driven by increases in Latin America, especially Brazil, where the fungicides business developed especially well in the third quarter of 2012.
Outlook
Based on the continued strong demand for agricultural commodities and high price, the Latin American seed industry and crop protection industry will remain bullish in 2013, which will support the tycoons' business in the region.
Table Contents of Crop Protection South America Monthly Report 1302:
Latin America boosts tycoons’ business
Overview of Argentina crops 2012
Fertilizer sales in Brazil to set new record in 2013
Brazil ANVISA approves flutolanil
Brazil: the engine for global biotech crop growth
Discussion of transgenic crops back in Ecuador
Paraguay approves Monsanto’s Intacta RR2 Pro soybean
Paraguay supports Monsanto in royalty dispute
Syngenta to expand corn seed production capacity in Formosa, Brazil
Nufarm explores seed business in Brazil
Arysta LifeScience partnership training Brazilian farmers for proper use of agrochemicals
Crops
Argentina will get the biggest corn production in 13 years
ICA surveys the health of carnauba in Colombia
Wheat to compete with corn in Brazil in the planting season of 2012/13
Weed Amaranthus puts Argentina on alert
Pests and rain to affect Argentina’s honey production in 2013
Drought and pests affect bean production in Minas Gerais, Brazil
Soybean harvest will end in Mato Grosso do Sul
A new method for disposing carrot discards in Argentina
Logistics impedes recollection of empty agrochemical containers in Mato Grosso
Smuggling was the target of Operation
Producers to join the battle against HLB in Paraguay
Chilean vegetable production to decline in 2013
SNA requests some measures for defending corn industry in Chile
South America Crop Protection Monthly Report, a monthly publication issued by CCM on 31st, offers timely update and close follow-up of South America's crop protection industry’s dynamics and the crops’ evolution and trends. This monthly report also features in-depth analysis on market development through abundant facts and figures.
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