Ask the Experts
As you face challenges in the crop protection market, AgriBusiness Global DIRECT wants to get your questions answered from experienced, industry professionals. Here are some of ABG readers’ and webinar attendees’ questions answered by the experts.
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David Li
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ABG: Can you provide a forecast for 2023 on the availability and prices for key AIs like tebuconazole, prothioconazole, and S–metolachlor?
DL: The tebuconazole market is at a stable low-pricing level. Since the weak demand and ordinary supply, the price is expected to be flat without big fluctuation. In 2023, the demand will be in a consumption-oriented position. The inventory level of tebuconazole does not need to be improved.
The prothioconazole supply is smooth in the Chinese market. Over-capacity affects the pricing of it. The price is heading down. In 2023, prothioconazole will be in a downward trend. The early marketing margin is diminishing. There will still be room for price reduction based on the contract volume.
S-metolachlor supply is very tight due to the strong demand of Syngenta. We assume it is because the EU energy issue pushes Syngenta to capture the supply of China as much as they can. And it is for meeting farmer demand in the 2023 season. The suppliers are focusing on Syngenta’s demand without additional cargo being released to the market. Even with the difficult supply situation, the price of S-metolachlor experiences less fluctuation. We see the suppliers considering the supply guarantee to Syngenta as the top priority, not the profit margin. In 2023, S-metolachlor will still be in a mature position in the global crop protection market. The capacity will not be easy to release soon. So, in 2023, the tight supply will not easily change. Stable higher prices will be possible.
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Kevin Price
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ABG: How do you talk to growers about the approach of combining biological and chemical crop protection?
KP: Over the last 10 or more years, we have developed and grown the project Growing For The Future (G4TF), designed to address specific issues or meet particular needs of growers. G4TF uses exactly this approach of programs combining biorationals with conventional chemical products for crop protection.
Our experience of working with growers of an expanding range of crops in Southern Europe is that they welcome the approach and understand the need for combined programs to meet the quality standards and other requirements imposed on them by food partners in the value chain.
It may be that in an arable farming situation there is some perception that biologicals work less well than conventional chemicals so there can be an initial hesitancy. It is also true to say that a biological approach can require greater technical knowledge and understanding of modes of action of the products to convince growers of the efficacy of the programs, but, in our experience, expert knowledge transfer and careful introduction of the combined programs convinces users that the outcome is effective.
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Derek Oliphant
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ABG: Can pricing for differentiated crop protection products hold up in 2023 even as crop prices decline? Or will they decline like generic products? Historically, have we seen pricing of differentiated products hold up better?
DO: With commodity prices declining and grower incomes expected to fall, this could lead to less spending on crop inputs, such as crop protection products. However, the lower crop prices could be offset by the anticipated declines in fertilizer and fuel costs. In general, if the market is negative in terms of crop prices, weather, other factors etc., then the lower-cost generic side of the industry tends to benefit, which could result in weakness in differentiated product pricing.
However, with Europe being a significant hub for the manufacture of differentiated (proprietary) active ingredients, through companies such as BASF, Bayer and Syngenta, there could be issues around cost and product supply due to high energy costs and the ban on the manufacture of active ingredients not registered in the EU in certain countries in the region (e.g. France, Germany) and in Switzerland. These factors could essentially prevent any sharp price declines for proprietary products. •
Photo of David Li courtesy of SPM BIOSCIENCES (BEIJING) INC.
Photo of Kevin Price courtesy of Certis Belchim B.V.
Photo of Derek Oliphant courtesy of AgbioInvestor