The agricultural inputs market, particularly in the cereal-related sector, is facing a serious challenge of shrinking margins, according to a recent market analysis report published by Rabobank, the Rabobank. The report, authored by a team of expert analysts from Global Agricultural Finance, provides insights into industry trends over the next two years.
According to the analysis, 2024 is a critical year for the agrochemical industry to deal with the high inventory crisis. Excessive product inventories accumulated since the New Crown outbreak are putting significant pressure on chemical pesticide companies, and Rabobank analysts emphasise that tight grain margins could prompt producers to seek cost reductions and efficiencies.
According to the Brazilian Plant Protection Products Industry Association (Sindiveg), and Rabobank's market analysis:
Brazilian chemical pesticides market size by 2023: $20.7bn
Expected market size in 2024: $20.9 billion (1.00% year-on-year growth)
Expected market size by 2025: $21.1 billion (1.20% year-on-year growth)
In the fertiliser market, the report shows:
Phosphate fertiliser prices such as monoammonium phosphate (MAP) are expected to remain above historical averages
Potassium chloride (KCl) market is relatively stable with international prices close to production costs
Fertiliser deliveries in 2024 are forecast at 45.5 million tonnes, down slightly from 2023
Fertiliser deliveries are expected to grow to 46.6 million tonnes in 2025, up 2.5% year-on-year
Analysts at Rabobank remain optimistic despite tighter market conditions for agricultural input companies and producers in the short term. It emphasises that the positive cycle will come to an end, and likewise the negative cycle will eventually come to an end. The market for such sub and bio inputs is expected to maintain a reasonable growth trajectory despite the challenges it will face in 2024.
