Dmitry Belov, head of the marketing department of JSC Firm "August", spoke about the state of the pesticide market in Russia and the possibility of optimizing farmers' costs for the necessary means of production in the next season.
“The Russian market of plant protection products (PPPs) as such has evolved quite seriously. At the initial stage of its development, what was important for buyers was the availability of the product and the possibility of its delivery, whereas today it directly responds to the changing needs of farmers, who are offered new solutions aimed at increasing the effectiveness and ease of use of certain protective products. plants. Both pesticide manufacturers and their distributors are beginning to create their own ecosystems for maximum customer convenience. It’s very interesting to watch this and, of course, it’s important to participate in it,” says Dmitry Belov.
However, despite all the maturity achieved at the industry level, the movement of counterfeit goods, illegal import of products from other countries, and other non-market practices still continue on the territory of the Russian Federation, the expert adds. However, in parallel, the FSIS “Saturn” system is being implemented, created to record batches of pesticides and agrochemicals during their circulation - import into the territory of Russia, production, storage, transportation, use, sale, neutralization, disposal, destruction and burial. In addition, the traceability system allows you to analyze and process the information provided, as well as monitor its accuracy. With proper configuration, the market for plant protection products should become more orderly, although both pesticide manufacturers and farmers initially showed themselves to be responsible participants in the process.
“Meanwhile, in the current situation - in the context of declining prices for raw materials of agricultural products, domestic oversupply, sanctions, complicated logistics, unstable prices for diesel fuel, spare parts and fertilizers - the economy dictates at least caution in making business decisions, and this can cause some heterogeneity of development of the agricultural sector. Many enterprises risk not being able to cope with the burden of expenses, and next year it is possible to revise the budgets for the purchase of means of production, including, in part, for plant protection products, says Dmitry Belov. – If previously farmers were of the opinion that reducing these costs was inappropriate, since it would bring nothing but crop losses, then with an excess of agricultural products on the market, this belief may be questioned. However, we warn farmers against radically reducing the cost of crop protection, since the majority of Russian agricultural enterprises are at the basic level of production intensification, and abandoning it, except for reducing efficiency and, as a consequence, increasing production costs, will not entail anything else.” .
Dmitry Belov states: domestic producers of plant protection products in general and “August” in particular, in more complicated conditions, are still ready for the challenges facing the agro-industrial complex in the field of plant protection. Optimization options are being explored by almost all enterprises in the industry, with the exception of those that are particularly successful in terms of start-up, business model or access to financing.
However, the primary attention of Russian farmers is now still focused on the possibilities of selection and technical support for the agro-industrial complex. Secondly, it is aimed at fertilizers and fuels and lubricants, which, although they are an internal product, but, as practice shows, are also capable of introducing a certain amount of unpredictability into the agricultural production process. As for plant protection products, the expert adds, prices for them in the middle of the calendar year tended to decrease, but in the future the situation is difficult to predict, given the volatility of exchange rates and other external factors that determine the economics of the pesticide industry. Thus, there comes a time when farmers should use all the accumulated experience and enlist the support of those partners from relevant industries who have proven their reliability in turbulent operating conditions.
“Now is not the worst time to start negotiations with suppliers and prepare contracts for the next season,” notes Dmitry Belov. “Moreover, for the last three years, farmers have been concluding contracts for the supply of plant protection products in advance - starting in November, and sometimes earlier, and some applications can amount to up to 70% of the total need for plant protection products for a particular enterprise.”
Affiliate material