The company "August" analyzed how the COVID-19 pandemic influenced the Russian market of chemical plant protection products (KhSZR) and the agro-industrial complex. So, in the spring of 2020, explosive demand for pesticides was recorded: in the market as a whole, the volume of drug shipment exceeded the level of the previous year by more than one and a half times. Initially, the growth of shipments was influenced by early spring, and then the farmers sought to stock up on plant protection products in advance, fearing logistical delays before sowing and increasing drug prices following the jump in the dollar. Quarantine in China could interfere with the work of small KhSZR supply companies that do not have stocks, while the main players strengthened their positions in the market. World prices for crop products remain high, supporting the solvency of agricultural enterprises.
According to the results of the 2020st quarter of 86, the August company increased the supply of plant protection products to agricultural enterprises by 2019% compared to the same period in 3. According to the Association of European Businesses (AEB) and the Russian Union of Manufacturers of HFCS, the market as a whole also experienced a significant recovery: in the first 2020 months of 10, the TOP-33,610 companies producing pesticides supplied HFSW customers in the amount of 2019 billion rubles without VAT (for comparison, the level of the 20,742st quarter of 15,099 - 57 billion rubles). By segments, the market looks like this: herbicides - 10,409 billion rubles (an increase of 57,7% compared to the first quarter a year earlier), fungicides - 4,015 billion rubles (an increase of 81,9%), insecticides - 3,548 billion rubles (an increase of 76%) and seed dressers - XNUMX billion rubles (an increase of XNUMX%).
In April-May, the excitement subsided, and the dynamics slowed down: according to the results of the first 5 months of 2020, farmers received 15% more KhSZR from the August company than last year.
“Several factors contributed to the increase in shipping growth,” commented Mikhail Danilov, Director of Marketing and Sales, August. - Firstly, in the period from 2018 to 2019, we switched from 18% VAT to 20% VAT, so that the number of people wishing to purchase a plant for the 2019 season in advance increased in 2018. This led to a decrease in shipment volumes at the beginning of last year, while in the current this factor no longer worked. Secondly, the early spring affected. Thirdly, in connection with the pandemic, agricultural producers showed some uncertainty that they would receive the right product at the right time. Fourthly, many of them, knowing that the cost of production depends on the dollar exchange rate, sought to manage to acquire as much as possible HSP at old prices. According to AEB and the Russian Union of Manufacturers of Plant Protection Products, according to the results of the 2020st quarter of 10, shipments of plant protection products by TOP-62 companies increased by XNUMX%. However, over time, the effect of rush demand began to level out - most farmers have already received the products they need. I think that if by the end of the year we reach a double-digit increase in percent, this will be a good result. ”
In the spring of 2020, almost all producers of the KhSZR were forced to raise prices for their products, since the cost of imported raw materials, although imported mainly from China, was traditionally tied to the dollar. In April, the August company adjusted the prices of the price list upwards by an average of 8,46% for all groups of drugs.
“The conclusion of contracts for the current season at the company traditionally began in November-December, and we did not change their conditions - like any large producer, we had enough supplies of raw materials purchased at a lower exchange rate to fulfill them,” says Mikhail Danilov . - I must say that at the beginning of 2020, before the jump in the dollar exchange rate, the prices for the KhSZR were even lower than in 2019 due to increasing competition in the market. So at the moment, the weighted average price of our products shipped this year under both old and new contracts is lower than last year. ”
The company "August" noted a slight decrease in profitability in the KHZR sector, since the prices of pesticides in Russia rose less than their cost. At the same time, the logistical difficulties associated with the pandemic did not affect the stability of the main players in the industry: only small companies that import products from China to the Russian market directly to the seed market could suffer because of them. On the whole, the Russian segment of the Khazar Plant Protection Plant will grow, because it has not yet reached the level of necessary technological saturation. Even provided that the cultivated area remains the same, the pesticide market will increase due to the intensification of agriculture. Demand growth today is especially noticeable in the group of fungicides, whose consumption indicators in Russia so far lag behind the technologically sound level, as well as in the group of insecticides. The increase in shipments of herbicides and seed dressers will also continue, but at a more moderate pace, since it is customary to buy preparations of these groups in Russia systemically, based on the sown area.
In recent years, prices for crop production were on average at an acceptable level, which contributed to the sustainable financial situation of farms. “The cost of food on world markets today is relatively high: many countries buy agricultural products, as they say, in reserve - in an atmosphere of general uncertainty against the backdrop of a pandemic. However, by autumn this process may slow down, and prices may decline. The crisis, in turn, affected the income level of the general population, and this can lead to a change in the structure of consumption, and after it the prices of products and raw materials for their production, ”notes Mikhail Danilov.
Within the framework of the Agroproject of the August company, the increase in new areas for agriculture in 2020 amounted to 58%.
“Our land bank is increasing mainly due to the acquisition of new farms, but at the same time we are gradually adding fallow lands — those that were abandoned and not cultivated some time ago,” notes Aidar Galyautdinov, CEO of August-Agro Management Company. - In 2020, a fifth was added to our four farms - in the Leninogorsk district of the Republic of Tatarstan. Its area is more than 25 thousand hectares. This year, we will sow the largest part of it with cereals for cleaning weeds and leveling fields, then we plan to focus on rapeseed. In general, the established prices for agricultural products suit us and allow us to develop. The demand for crop products at the end of the year is unlikely to change significantly, but its prices are formed on export markets and will depend on whether the state starts to introduce new restrictions in this area. Now prices are at their peak, although the traditional decline is beginning - on the eve of a new crop. ”
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