By the end of 2020, the Russian Federation may become one of the six largest consumers of chemical plant protection products (CPPP) in the world, predicts the August company. According to the Association of European Businesses (AEB), in Russia, sales of pesticides from 10 leading manufacturers in the first half of this year increased compared to the first half of 2019 from RUB 65 billion to RUB 77 billion. (without VAT). In particular, the volume of sales of the company "August" for the first two quarters of 2020 increased in total by 12,5% in relation to the same period last year. The development of the CPPD segment was not prevented by any logistical restrictions due to the pandemic Covid-19, no drought in some regions of Russia. After a sharp jump in pesticide demand in I quarter of this year, the market returned to normal operation and stable growth rates.
“In the HCPP segment, sales in the first half of the year, as a rule, account for about 75-80% of annual sales,” explains Mikhail Danilov, Director of Marketing and Sales at Firm “August” JSC. - In addition, at the beginning of the year, the behavior of agricultural buyers was influenced by concerns about price increases and late receipt of necessary products due to quarantine restrictions. Therefore, a significant part of the contracts were concluded earlier than usual. It should also be borne in mind that our segment itself continues to grow. "
“Despite some difficulties with logistics (for example, in order to fulfill obligations to partners, we had to deliver a number of orders even by air) and despite serious exchange rate fluctuations, 2020 is primarily indicative of the fact that the market factor has fully manifested itself in the market. competition, - adds Dmitry Plishkin, head of the sales department of the company "August". - For large companies with well-built logistics and production processes, there was practically no price increase. As for the next season, the conjuncture will be determined by the exchange rate and the dynamics of prices for active ingredients. "
The company "August" reminds that in the first and the beginning of the second quarter of this year, there was a rush on the HCPP market due to the early spring, volatility of currencies and restrictive measures associated with the pandemic. However, by the end of the first half of the year, the situation leveled off: the dollar exchange rate, to which the prices for active ingredients for CPPP are tied, did not reach critical values, serious problems with the transportation of pesticides between regions were avoided, and the incidence of coronavirus in agricultural organizations did not lead to significant production problems. Today, the agro-industrial complex as a whole functions in a regular mode - the same as last or the year before last; the same applies to the segment of plant protection products. The impact of the pandemic on the market is no longer observed, according to the company's experts: even if a "second wave" comes and quarantine measures are reinforced again, agriculture has already adapted to such working conditions.
Meanwhile, several agricultural regions in 2020 suffered from a complex of weather factors: the drought in the Southern Federal District, which actually began last autumn and did not allow the soil to accumulate a sufficient supply of moisture, continued in the spring, and in the second decade of April the crops were damaged by late frosts. The moisture deficit in the Southern Federal District continued until the very harvest. Drought is also observed in the Urals and Western Siberia. For a number of farms, this threatens with financial losses and a decrease in profitability, but these factors have not influenced the global consumption of agricultural chemicals in Russia this season, the company's specialists believe. It is possible that some agricultural producers have stocks of pesticides that have not been used due to weather conditions. However, in the next season, the price situation in the food market will affect the consumption of crop protection products more than the effects of drought. High prices for crop products will encourage consumers to use better and more complete protection schemes, while low prices for cheaper and less effective ones.
It should be noted that, according to the AEB statistics, the share of the most popular group of drugs - herbicides - is consistently decreasing in the structure of sales of the 10 largest players on the Russian CPPP market. So, in the first half of 2019, it was 47%, in the same period of 2020 - 43%. At the same time, in absolute terms, the sales of herbicides are growing: from 30,6 billion rubles. in the first half of the previous year to 33,5 billion rubles. in the first half of this year.
“If we look at the structure of the Russian market, we will see that this is primarily the herbicide market. But the use of intensive technologies, varieties and hybrids with high yield potential is gradually changing this structure. In particular, the share of seed disinfectants, fungicides and insecticides - drugs that help protect high yields from diseases and pests - is increasing. Therefore, with an increase in sales in absolute terms, the share of herbicides gradually decreases. In general, the Russian market in the last decade has been growing at a rate that is almost 4 times faster than the world one: for example, from 2010 to 2019 it grew by an average of almost 11% annually. Last year, Russia ranked 7th in the world in terms of the CCP market size after Brazil, the USA, China, India, Japan and Argentina. And by the end of this year, taking into account the significant devaluation of the Argentine currency, we have every chance to take the 6th place, ”Mikhail Danilov assesses the situation.
Material provided by the press service of the company "August"