Paraguay’s
pesticide import grows despite adverse market
According to a Chinese Customs data report, China’s
pesticide exports to Latin America in 2015 amounted to 384,040 tons, down 9%
year-on-year, with an export value of US$1.83 billion, marking a drop for the
second consecutive year and a 24% overall decline. China’s pesticide is
exported to 27 countries of the 34 countries/regions in Latin America. The top
10 countries by export value are ranked as follows: Brazil, Argentina,
Colombia, Paraguay, Mexico, Uruguay, Chile, Peru, Ecuador, and Guatemala.
China’s pesticide export value to these 10 countries accounts for more than 87%
of the total export value to Latin America, while its volume of exports
accounts for some 90% of the total (Table 1).
In 2015, Brazil and Argentina remained the top two
countries in Latin America to purchase the largest amount of pesticide from
China for US$613.45 million and US$261.62 million, respectively, accounting for
34% and 14% of the total value of exports, down 48.82% and 67.16%,
respectively, from 2014.
The Brazilian crop protection product sales of 2015
reached US$9.6 billion, down 21.56% year-on-year. According to an analysis by
Sindiveg, the drop in sales was a result of a devalued Brazilian currency,
major smuggling operations, increased difficulties faced by farmers in
obtaining loans, and high stocks of goods held by manufacturers and
distribution channels. The Brazilian currency was devalued by 50% in 2015, which
came as a major shock to China’s pesticide exporters to Brazil.
A similar situation occurred in other Latin American
countries, where the economies witnessed a slump: The currency was devalued,
commodity prices fell, and the weather was unfavorable so planting structures
were adjusted. As a result, China’s exports of pesticides to most Latin
American countries suffered a drop, both in value and volume, with the only
exception being Paraguay, where import volume from China grew 48.56%, prompting
a rise in rankings to No.4 in 2015 from No.7 in 2014.
According to China’s Pesticide Export to Paraguay
Analysis Report issued by AgroPages, as shown in Table 2, China’s exports of
pesticide technical in 2015 amounted to $71.10 million, up 21% year-on-year, while
volume increased by 67%. Formulations exported amounted to $58.95 million,
marking a 3% drop year-on-year, although volume had increased 63%.
According to German Pessagno, COO of Paraguayan company
Chemtec, agriculture has witnessed a global decline in recent years. Further,
the Brazilian and Argentine currencies have been devalued, resulting in an
increase in the export of farm products and a significant impact on the
agricultural sector of Paraguay. In this highly agriculture-dependent country,
the export of farm products contributes 20% of the GDP. Despite this
unfavorable situation, the government is still providing inputs to the
industry. As seen in 2015, loans issued to the industry increased by 33%,
reaching $3,142 million, which stimulated further investment in production,
including for agrochemical products. In 2015, the total imports of pesticide by
Paraguay reached a historic record of 45,000 tons, worth $410 million, which
also led to an increase in China’s pesticide exports to Paraguay. “Lots of
agrochemicals were sold via Paraguay to other countries in Latin America,” said
an industry insider, who believed that transit trade was another important
reason for the increase in Paraguay’s imports of pesticide.
Analysis
by Product
New
source of growth brought by weed resistance
In 2015, China’s exports of pesticides to Latin America
were still highly centralized, where the top 20 pesticide varieties accounted
for 69.64% of the total exports to the region. The export value touched $1.28
billion and volume reached 353,270 tons, accounting for 70.76% of the total
export volume, as shown in Table 3.
Compared with 2014, China’s exports to Latin America in
2015 did not show much of a difference in product structure or variety.
Herbicides still led exports by a wide margin. There were 11 herbicide products among the top
20 export products, accounting for 72% of the export value. This was followed
by four fungicide products, accounting for 9% of the export value, and five insecticide products, accounting for
19%.
