Agrochemical market thriving in Russia

Russian agrochemical market is likely to show the world’s highest growth rates this year, says AgriBusiness Global. According to local analysts, the growth of the market in 2021 may outpace last year, when Russia overtook France to become the largest agrochemical market in Europe.

Despite such impressive growth observed in recent years, the market is still far from saturated, and the use of agrochemicals by local farmers continues its surge, considers Mikhail Danilov, the head of Marketing and Sales of Russia’s key agrochemical producer Avgust. He attributes the ongoing growth of the local agricultural sector to huge support provided by the state, primarily in the form of low-cost subsidised loans. “In the case of maintaining of such dynamics this year, the market will most likely show the highest growth rates among the top ten global agrochemical nations,” he believes.

Global agrochemicals producers operating in the Russian market hold the same views. Representative of Syngenta Russia Ivan Konovets points out that since the beginning of the 2000s, the Russian market has demonstrated higher growth dynamics compared with other large global markets due to the structure of crops cultivated in the country. “There is no doubt that the market will continue to grow this year,” he says adding that the biggest growth is expected to be observed in the insecticide segment, which has recently become one of the market’s most promising. However, much will depend on the ruble exchange rate, as over 80% of the cost of plant protection products depends on foreign currencies. The devaluation of the ruble coupled with high prices for agricultural products “will contribute to a further growth of prices and the growth of the market by 7% to 9% this year,” expects Konovets. Syngenta is going to launch its own large-scale production for the development of agrochemicals in Russia this year.

Other local producers and global manufacturers also consider revising their strategies for further development in Russia. Bayer AG confirmed the intention to build a plant that will specialise in the production of crop protection products within the territory of Lipetsk Special Economic Zone. The facility will mainly focus on the Russian market, while some products will be exported. Currently, the German manufacturer produces some 15 crop protection products in Russia in cooperation with local company Agrochemikat.

Another German agrochemicals giant, BASF, is also considering entering the promising Russian market. The company’s spokesperson Stephanie Reiss sees a clear trend towards intensified agriculture, as Russian farmers focus not only on higher yields but also on quality. Coupled with export potential in the wheat and oilseed segments and growing global demand for high-quality agricultural production, it will secure further growth of the crop protection market in Russia, believe analysts.