2019 was the record year for registration of pesticides in Brazil. A total of 475 registrations were approved
by the Ministry of Agriculture (MAPA). Among these, 270 are registrations of Equivalent Technical Products (ETP), also known as generic products.
Since 2019, the Ministry of Agriculture has adopted new procedures for the registration evaluation of Equivalent Technical Products. In addition to the dossier and documentation provided for in legislation, MAPA has required registrant companies to provide documentation proving the registration in the country of origin, together with the operating license to manufacture the pesticide that is being registered.
On the other hand, in the last 10 years, the Chinese government has demanded very strict improvements in
relation to the preservation of the environment, such as treatment of effluents and reduction of pollutant
emissions, for the operation of factories in general, which has restricted even the maintenance of those that are already established in certain areas. There are several reasons. It is due to the fact that the infrastructure would be undersized, not having the capacity to support the current production, or not allowing the factory expansion, or due to the high costs necessary to make improvements, or due to the fact that many factories are located in urban areas, commercial areas and even in residential areas.
As a practical result, several factories have been or are being closed, or have had to be re-established in other locations with more suitable infrastructure. The immediate consequences of this are decrease in supply and increase in prices, even if temporarily. Even so, China is by far the biggest supplier of pesticides to Brazil, if the number of Chinese manufacturers listed in the Equivalent Technical Product (ETP) registrations approved in 2019 is taken into account.
According to the survey conducted by AllierBrasil Consulting, the Chinese manufacturers represent 89.4% of the manufacturers listed in the registrations of Equivalent Technical Product (278 times). India, also a traditional manufacturer of pesticides, comes in second place with 7.1% (22 times), followed by Taiwan and Japan, with 1.6% (5 times) and 0.6% (2 times), respectively. In 9 approved registrations, there are manufacturers from two countries in the same registration.
In other survey elaborated by AllierBrasil Consulting (2019) shows how China has gained a reputation
and consequently the predominance in the supply of generic pesticides on all continents. These put Chinese manufacturers at strategic advantages with scale production and more competitiveness, ahead
of other manufacturing countries. Brazil being the largest pesticide market in the world, and one of the leaders in the production and export of agricultural commodities, it was expected that there would be local manufacture of this important agricultural input on a large scale.
Ironically, there is not a single approved registration with a local manufacturer, which shows a high external dependence of this input for agricultural production. Considering the high investments in the installation of pesticide manufacturing sites and the entire production chain, the time required to obtain the manufacturing and environmental licenses, and approval of the registration of the product to be
manufactured from MAPA – and, most importantly, the fact that the Chinese manufacturers already have
predominant access to the international markets, makes it extremely difficult for Brazil to have competitiveness in the production of pesticides.
Except, however, through the imposition of import taxes and/or subsidies benefiting potential local manufacturers. Considering the countries of origin of the approved registrations, it can be suggested that local pesticide distributors have assurance in the supply and in the quality of the made in China products. However, all these approved registrations are not exclusively owned by the local distributors. Even though in a much smaller number than local distributors, several registrations are owned by the Chinese manufacturers – who have been striving to access the Brazilian market directly for more than a decade.
In the race to access the most attractive pesticide market in the world, Chinese manufacturers are at a major disadvantage. On the other hand, they have the competitive edge in manufacture and supply, as well as the financial resources to invest in the incorporation and acquisition of companies, as well as of
product registrations. In a short period of time, Chinese companies acquired the giant Syngenta, ADAMA,
Stockton and Belagrícola, Dow AgroSciences Seeds, among others. There are still many ongoing changes that are transforming this sector.
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Flavio Hirata is an Agronomist by the University of São Paulo – Escola Superior de Agricultura ‘Luiz de Queiroz’, is a partner at AllierBrasil, and has been promoting Brazilian agribusiness since 1999. Flavio Hirata provided the following article for AgriBrasilis.