According to the forecast of the Russian Union of Producers of Chemical Plant Protection Products (RSP KhPZR), the volume of domestic consumption of pesticides in the country in 2022 will be 220 thousand tons. For comparison: in 2021, this figure was at the level of 213,4 thousand tons, and 12 years ago, in 2010, Russian farmers purchased only 58,1 thousand tons of CPPP. Preparations that improve crop productivity by suppressing weeds, pests and diseases have a very serious impact on crop volumes and business profitability, reducing the risks of farmers. At the same time, the share of domestic products on the market is steadily growing: in 2022, domestic output should reach 130 thousand tons, that is, about 59% of the market, while the same figure was 54% a year earlier.
According to the experts of the RSP KhPZR, the intensive growth in the production of domestic plant protection products in the Russian Federation has been going on for five years. In 2017, a peak of imports of pesticides was recorded in the amount of 78,2 thousand tons per year, however, by 2021, the supply of foreign companies decreased to 61,9 thousand tons, and according to the forecast for 2022, their volume will be about 50 thousand tons. In parallel, Russian producers in the period from 2017 to 2021 increased the output of their own products from 59,8 thousand tons to 115,3 thousand tons, respectively. It is expected that in 2022 this figure will already reach 130 thousand tons. This is confirmed, among other things, by the growth in imports of raw materials needed for the formulation of drugs in Russia: it is estimated that it will increase by 8% compared to 2021 (from 72 thousand tons to 78 thousand tons).
The picture of consumption of plant protection products will continue to change, experts say.
“With the volume of the domestic market of about 220 thousand tons, the total design capacity of Russian companies today is 360 thousand tons. So the gap between the volumes of imports and domestic production will continue to grow, which is fully consistent with the policy of import substitution,” says Vladimir Alginin, Executive Director of the RSP KhSZR and Deputy General Director of Firma Avgust JSC, the largest pesticide manufacturer.
Recall that in 2021, 54% of CPPP in the Russian market accounted for domestic products, 13% were imported from the European Union, 12% from China, and 4% from other countries. In addition, another 17% of products were produced at domestic facilities under the tolling scheme by foreign companies. In 2022, according to the forecasts of the RSP KhPZR, about 40 thousand tons of pesticides will be produced in Russia under the tolling scheme, that is, more than 18%.
Among the factors that pushed foreign suppliers to produce drugs at Russian factories and build their own production facilities are duties on imports of herbicides from EU countries and incentives to localize production in Russia.
“In addition to multinational corporations that started formulating pesticides in the Russian Federation, those companies that were previously suppliers of CPPPs from China also opened their factories, simply registering them in our country. Some of these firms have grown and joined the ranks of domestic producers providing jobs and contributions to the state budget. This part of the market is becoming more transparent for RSP KhPZR, regulatory authorities and consumers of plant protection products,” notes Vladimir Alginin.