How can Chinese companies enter the huge Latin American pesticide market?

The Latin American pesticide market is one of the most important markets in the global agrochemical field. Although its pesticide market has broad prospects, there are some issues that should attract the attention of domestic pesticide companies: ① Latin American registration procedures are becoming more and more complex, and companies must fully understand the products they need to register. To avoid blind registration; ② International pesticide residue limit regulations are increasingly becoming a trade barrier. When applying for pesticide registration, companies must pay attention to the relevant pesticide residue regulations of the country of export; ③ Many Latin American countries are increasingly concerned about public health and environmental safety , Enterprises should be familiar with national conditions and grasp the development trend of the pesticide market; ④ In the process of pesticide registration in Latin American countries, the registration requirements of various countries are getting higher and higher, and the requirements for pesticide registration materials and laboratories are also different. Since Brazil is one of the important pesticide markets in Latin America, the focus is on the Brazilian pesticide market.


Brazil's pesticide market status

From January to March 2020, the area of pesticide use in Brazil increased by about 7%. The Brazilian Crop Protection Association Sindiveg reported that the equivalent treatment area (PAT) increased significantly in the first quarter, from 513 million hectares to 550 million hectares. However, after the pesticide market in Latin America reversed the global trend and increased by 8% in 2019, sales in other regions declined. According to consulting firm Phillips McDougall, companies in Latin America have strong sales, especially in Brazil, which has formed a stable market with a scale of close to US$16 billion. Argentina has also steadily increased after suffering a severe drought. Argentina and Brazil have become beneficiaries of the Sino-US trade war.

According to related reports, at the beginning of 2020, Latin America's imports from China dropped by 40%, and the total imports from China and India dropped by 28% to approximately US$199 million, of which China’s exports fell by US$69 million. Its purchasing market turned to Europe. Imports from continental Europe increased by 10% to 102 million US dollars, and imports from the United States stabilized at around 154 million US dollars. The trade war between China and the United States seems to have had an impact on China's exports. In 2018, China exported $1.314 billion worth of pesticides to the United States and $988 million to Brazil. Unlike previous years, in the first three quarters of 2019, China’s largest exporter was not the United States, but Brazil, with exports of pesticides of 1.027 billion U.S. dollars, followed by the United States at 846 million U.S. dollars.


Brazilian product registration

Brazil registered 474 pesticide products in 2019, including 448 generic pesticides, accounting for about 94.5%, and 40 biological drugs. In 2018, the number of pesticides approved for registration reached 450. Recently, major new approval registrations are Bayer CropScience’s fungicide/nematicide fluopyram and a fluopyram-based formula that can be used for cotton, kidney beans and soybeans, as well as for the control of coffee, corn, and potatoes. , Soybean and sugarcane nematodes. Fluopyram was first marketed in 2012. So far, it has been registered and marketed in 50 countries including China, the United States, the European Union (23 countries), Australia, Romania, Turkey, Chile and Mexico. It is not only a new generation of excellent nematicide, but also a broad-spectrum fungicide, seed treatment agent, agricultural product storage preservation agent, etc., with versatility. Other approved pesticides include Mitsui Chemicals' insecticide Dinotefuran, Corteva's sulfoxaflor (trade name Isoclast) and lambda-cyhalothrin.

The Brazilian Ministry of Agriculture has formulated 3 new reference standards for biological pesticides. The regulations will allow companies to register and immediately produce biopesticides that can be used in organic agriculture and conventional agricultural production. This regulation means that any company can apply for organic crops based on approved biological pesticides.

In recent years, the number of biopesticides approved in Brazil has soared. In 2019, 40 kinds of biopesticide products were approved. By the end of June this year, the Ministry of Agriculture approved 36 kinds of biopesticide products. In May, the Ministry launched a plan to encourage the use of biological control, which aims to promote the research, production and use of agricultural biological products. According to related reports, from 2015 to 2019, more than 40 companies registered biological plant protection products in Brazil for the first time.


Brazil's pesticide management measures

In March 2020, Brazil reclassified the toxicity of 252 pesticide formulations. The new toxicological classification aims to assess the actual risks of agricultural pesticides, and should also better conduct primary studies with growers and pesticide operators. Communicate and let them understand the protective measures that must be taken when using pesticides to avoid harm to human health. There are approximately 2,300 mixtures approved in Brazil. As of 2019, 1,924 of the 1,942 evaluated mixtures have been reclassified for toxicity.

Prohibition and Restriction of Pesticides in Latin America

In the second half of 2019, the Mexican Ministry of Environment refused to import 1,000 tons of glyphosate. Minister Víctor Toledo stated that unless there is conclusive scientific evidence to ensure that the use of glyphosate will not affect or violate any legal rights and will not pose a threat to the environment, approval of the import of glyphosate will be refused. So far, the Ministry has continued this policy. A year ago, Costa Rica also issued an announcement restricting the use of glyphosate.

In 2019, Argentina issued a proposal to ban the use of 2,4-D herbicide butyl ester and 2,4-D isobutyl ester formulations.

The Peruvian Ministry of Health issued a resolution stating that from November 30, 2020, methamidophos pesticides cannot be used, and pesticides containing the active ingredient cannot be produced, packaged, distributed or stored.

Other prohibitions and restrictions include: Brazil prohibits thiram powder for farm seed treatment and foliar spray; Costa Rica restricts the use of glyphosate, only for agricultural use and professional prescription use; Uruguay prohibits the import and registration of fenthion And renew the registration.


Suggestions for Chinese companies to enter the Latin American market

Currently, affected by the Sino-US trade war, the economic and trade between China and Latin America has weakened slightly. As China and Latin America are separated by vast oceans, they have created practical obstacles and barriers to bilateral economic and trade exchanges. Although this obstacle has been eased and weakened with the development of modern technology, Latin America's understanding of China is relatively limited, cultural differences are relatively large, and communication is relatively difficult. Therefore, Chinese companies have little experience in expanding in Latin America. There are many obstacles and failures in this market expansion. To this end, the author gives the following suggestions: ① Language, Latin American countries rarely speak English, and learning Spanish is necessary; ② Do market research in advance, do not blindly enter the Latin American market, and pay attention to the production of your products in Latin America. As well as the situation of competitors, accurately locate their product advantages, and find product differences; ③ Patience, Latin American countries are less efficient, and often there may be pigeon releases, and the negotiation procedures of Latin Americans are usually relatively long because they are generally good at Bargaining; ④ Pay attention to avoiding risks, especially the economic risks of Latin American countries.