The Global Agrochemical Market in 2012 - - Agro, Inc. · The Global Agrochemical Market in 2012 - Preliminary Review Our preliminary analysis of country market and ... global market

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The Global Agrochemical Market in 2012 -Preliminary Review

Our preliminary analysis of country market andcompany performances in 2012 estimates that theglobal market for agrochemicals, used in both cropand non crop situations, has improved by 6.6% toreach $53,635 m. at the distributor level.

Global Agrochemical Market Value ($m.)SalesSa lesSa lesSa lesSa les C r o pC r o pC r o pC r o pC r o p Non CropNon CropNon CropNon CropNon Crop TTTTTotalotalotalotalotal( $ m . )( $ m . )( $ m . )( $ m . )( $ m . ) Pro te c t i onPro te c t i onPro te c t i onPro te c t i onPro te c t i on Agrochemica lAgrochemica lAgrochemica lAgrochemica lAgrochemica l

2006 30425 5150 35575

2007 33390 5365 38755

2008 40475 5655 46130

2009 37860 5860 43720

2010 38315 5880 44195

2011 44015 6290 50305

2012 47255 6380 53635

The Global Crop Protection Market

Based on this analysis, the global crop protectionmarket is estimated to have increased by 7.4% toreach a total value of $47.255 m. during 2012. Keyelements in this market performance were morestable prices of glyphosate, crop commodity pricessustained at a high level and the strengthening ofthe US dollar. In Europe, the market benefittedfrom an early end to the winter, with improvedvolumes and prices, although a wet summer affectednorthern Europe, whilst the south was dry. Centraland East Europe benefitted from an improvedeconomic position, but suffered from a very coldwinter and a dry summer. The US market got offto a good start, but then drought affected the centralcornbelt, although other parts of the country weremore positive. Maize use for ethanol production wasaffected by the high cost of the feedstock and theending of the blending subsidies in 2011. Canadarecorded significant growth due to recovery from

the flooding that had depressed 2010 and 2011.Strong crop prices and weaker currencies drovegrowth in the Latin America market despite a drystart to 2012 in Brazil and Argentina. Asian marketswere generally very positive, recovering from adverseweather in 2011, notably in Japan and Thailand,although India suffered another variable monsoonseason in 2012 and wet weather affected SouthernChina and countries in a similar latitude. Australiabenefitted from good growing conditions, but lowpest and disease pressure and the impact of astrong currency. When currency movements andinflation have been removed from the results, realgrowth in the market is estimated at 10.0%.

Crop Protection Market Performance 2012YYYYYe a re a re a re a re a r Convent i ona lConvent i ona lConvent i ona lConvent i ona lConvent i ona l Change fromChange fromChange fromChange fromChange from

Agrochemica lAgrochemica lAgrochemica lAgrochemica lAgrochemica l Previous Previous Previous Previous Previous YYYYYearearearearearMarket ($m)Market ($m)Market ($m)Market ($m)Market ($m) (%) (%) (%) (%) (%)

N o m i n a lN o m i n a lN o m i n a lN o m i n a lN o m i n a l R e a lR e a lR e a lR e a lR e a l

2006 30,425 -2.5 -6.5

2007 33,390 9.7 2.8

2008 40,475 21.2 10.2

2009 37,860 -6.5 -1.5

2010 38,315 1.2 0.2

2011 44,015 14.9 5.9

2012 47,255 7.4 10.0

Note: Market value is at distribution level and AverageYear exchange RatesCurrency affects again had a significant impact

in 2012, with the dollar strengthening against mostmajor currencies except the Japanese Yen, theChinese Yuan and the Australian dollar. Stable toimproving glyphosate prices benefitted all regions,but especially the Americas and Asia.

At the regional level, Latin American markets


recorded the strongest growth, gaining from strongcrop prices and increasing demand for maize,soybeans and sugarcane. Asian markets werestronger in 2012, assisted by recovery from adverseweather in 2011. Growth was again driven by Indiaand China, despite a variable monsoon season inIndia and flooding in Southern China. A key factorin China was the banning of the 10% glyphosateformulation forcing a trading up to higher valueproducts. Australia benefitted from normal weather,and strong crop prices offsetting the strength of theAustralian dollar, however disease and pest pressurewas low. The Japanese market improved steadily,recovering from some of the impact of the Tsunamiin 2011. The NAFTA market benefitted from recovery

from flood affected 2010 and 2011 in Canada, betterwater availability in Mexico and the Southern USA,although the central US cornbelt was badly affectedby drought. Crop prices remained high, promotingfungicide usage in areas of adequate rainfall, whilstglyphosate prices improved marginally. Europebenefitted from an early end to the winter, but washeld back by a wet summer in the north and drynessin the south. East Europe suffered from a very coldwinter and a dry summer. The planting of cerealsin Russia recovered for the 2011/12 season, but theharsh winter killed some crops, whilst a hot drysummer limited production. The Ukraine sufferedfrom similar weather conditions.

Regional Market Performance 2012 – Nominal

US Dollar Growth

RegionRegionRegionRegionRegion 2012012012012011($m)1($m)1($m)1($m)1($m) 2012($m)2012($m)2012($m)2012($m)2012($m) GrowthGrowthGrowthGrowthGrowth2012/2012012/2012012/2012012/2012012/2011(%)1(%)1(%)1(%)1(%)

NAFTA 8412 9047 7.5Latin America 10060 11540 14.7Europe 12196 12510 2.6Asia 11607 12275 5.8Rest 1740 1883 8.2WWWWWorldorldorldorldorld 4401544015440154401544015 4725547255472554725547255 7.47.47.47.47.4

Whilst all regions enjoyed growth in nominal US dollar terms, as stated above among the keyfactors in market development in 2012 was the strengthening of the dollar and recovery from adverse2011 weather. As a result, the provisional analysis of the market shows a more significant marketimprovement in real terms when currency and inflation are taken into account.

Regional Growth Rates 2012

RegionRegionRegionRegionRegion Nominal GrowthNominal GrowthNominal GrowthNominal GrowthNominal Growth Real GrowthReal GrowthReal GrowthReal GrowthReal Growth2012 / 2012012 / 2012012 / 2012012 / 2012012 / 2011 (%)1 (%)1 (%)1 (%)1 (%) 2012 / 2012012 / 2012012 / 2012012 / 2012012 / 2011 (%)1 (%)1 (%)1 (%)1 (%)

NAFTA 7.5 5.4Latin America 14.7 20.4Europe 2.6 8.2Asia 5.8 9.9

At this time it is difficult to be precise about product performance, however all sectors of the marketare expected to record growth in 2012, herbicides due to strong demand and more positive glyphosateprices; insecticides, with sales growth led by new introductions; fungicides due to a good start to theyear in Europe, strong crop prices, growth in developing markets and a continuing strong soybean sector.


Company Results First Nine Months 2012

CompanyCompanyCompanyCompanyCompany LocalLocalLocalLocalLocal First NineFirst NineFirst NineFirst NineFirst Nine First NineFirst NineFirst NineFirst NineFirst Nine %Change%Change%Change%Change%ChangeCurrencyCurrencyCurrencyCurrencyCurrency MonthsMonthsMonthsMonthsMonths MonthsMonthsMonthsMonthsMonths 2012/12012/12012/12012/12012/111111

20120120120120111111 20122012201220122012Local m.Local m.Local m.Local m.Local m. $m$m$m$m$m Local m.Local m.Local m.Local m.Local m. $m$m$m$m$m LocalLocalLocalLocalLocal $m$m$m$m$m

Amvac $ 220 220 263 263 19.5 19.5

BASF • 3343 4702 3802 4874 13.7 3.7

Bayer (Excluding seed) • 4916 6914 5707 7317 16.1 5.8

Cheminova DKr 4065 741 4545 782 11.8 5.6

Chemtura $ 290 290 311 311 7.2 7.2

Dow AgroSciences** $ 4311 4311 4816 4816 11.7 11.7

DuPont $ 2229 2229 2409 2409 8.1 8.1

FMC $ 1055 1055 1271 1271 20.5 20.5

MAI $ 1998 1998 2115 2115 5.9 5.9

Monsanto* $ 2567 2567 2810 2810 9.5 9.5

Syngenta $ 7458 7458 7804 7804 4.6 4.6

***** Monsanto Results are for the three quarterly periods ending in August** ** ** ** ** Includes seeds

The sales performances of the leading agrochemicalcompanies over the first nine months of this currentyear are outlined in the above table. Companyresults were generally very positive, with, for thecompanies listed, the greatest growth recorded by

Amvac with strong sales of corn soil insecticides,and by FMC assisted by the significant growth ofthe Brazilian market, a new joint venture inArgentina and product range expansion based ona number of product agreements.

CROP TRENDSCROP TRENDSCROP TRENDSCROP TRENDSCROP TRENDS

Crop Planted Areas 2012

CropCropCropCropCrop Global Global Global Global Global AreaAreaAreaAreaArea ChangeChangeChangeChangeChange Global ProductionGlobal ProductionGlobal ProductionGlobal ProductionGlobal Production ChangeChangeChangeChangeChange20122012201220122012 2012/2012012/2012012/2012012/2012012/20111111 20122012201220122012 2012/2012012/2012012/2012012/2012012/20111111Ha. m.Ha. m.Ha. m.Ha. m.Ha. m. %%%%% TTTTTonnes m.onnes m.onnes m.onnes m.onnes m. %%%%%

Wheat 217.41 -2.0 653.05 -6.1Maize 175.23 +3.6 839.02 -4.4Rice 158.70 -0.1 465.10 0.0Soybean 108.55 +6.3 264.28 +11.0Oilseed Rape 34.27 +3.7 59.00 -2.6Cotton 34.10 -4.9 25.33 -6.3Sunflower 24.76 -3.7 34.81 -11.0


In 2012, the global planted area of maize, soybeanand oilseed rape increased again, whilst the ricearea was stable, but wheat, cotton and sunflowerall declined. Production was however less positive,with only soybeans recording an increase, riceproduction stable, but output of all other majorcommodities declining. For wheat and oilseed rapethe key reason for this was adverse weather inEurope; maize production was depressed by droughtin the US central cornbelt; sunflower was affectedby drought in Argentina and poor weather in Europe,as well as reduced planted area; cotton waspredominantly affected by overproduction in 2011resulting in declining crop prices and falling plantedareas, with production also affected by a variablemonsoon season in India.

The increase in soybean production was drivenby Latin America and despite reduced output in theUSA again affected by the drought in the Midwest.

Since 2005, there has been a consistent increaseeach year in the price of crop commodities. During2008 prices peaked due to stock reductions, and theimpact of financial speculation. During 2009, cropprices fell from this peak but remained at a levelabove that prevailing in 2006. The impact of adverseweather, poor harvests and rising demand has drivencrop prices higher each year since. The only exceptionis cotton, where overproduction and excess stockshave resulted in falling prices in 2012

50

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1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$/Ton

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150.00

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1150.00

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J FMAM J J ASOND J FMAM J J ASON D J FMAM J J ASON D J FMAM J J ASON D J FMAM J J ASO

2010

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20122008 2009 2011

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J FMAM J J AS OND J FMAM J J A SON D J FMAM J J ASON D J FMAM J J AS ON D J FMAM J J A SO

$/Ton

Maize

Rice

2009 2010

$/Ton

WheatMaize

20122008 2011

Key Factors Affecting the Crop Protection Marketin 2012

More stable glyphosate prices.

Strength of US dollar against most majorcurrencies.

Sustained crop commodity prices.

Latin America benefits from high demand andimproved economics of production

Good corn planting season in US mid west, butsubsequent drought.

The EU benefitted from an early end to thewinter, but suffered from a wet summer in thenorth and dryness in the south.

East Europe suffered from a harsh winterfollowed by drought.

Southern China affected by flooding, butglyphosate price improvement.

Further increase in GM crop area and adoptionof stacked maize varieties.


Overview and Outlook

The outlook for 2013 remains positive, with cropprices strong and futures prices sustainedthroughout the year, predominantly due to risingconsumption and limited 2012 harvests in Europeand North America. Wheat production in 2012improved in Australia and Canada, but declinedin Europe, with falling stocks resulting in a positiveprice environment for 2013. Maize and soybeandemand remains high after a poor 2012 harvestin the USA, despite declining use of corn for ethanol.Dry weather affected sugarcane production in

Brazil, resulting in high sugar prices. Rice stocksremain low by historic standards, sustaining riceprices and the profitability of production. Highcotton stocks have depressed prices giving a lessfavourable outlook for the crop.

The crop protection market in 2012 benefittedfrom improved volumes and prices. Recovery fromadverse weather in 2012 has provided furtheropportunities for volume growth in 2013, whilstcontinuing strong crop prices and a healthy farmeconomy also provide an environment conduciveto price improvement.


COMPANY NEWS

Forecast for Growth: Weather for Smaller Farms

It’s no secret that weather and agriculture areintricately linked. In addition to the normal cyclesand fluctuations, extreme conditions are becomingmore frequent occurrences , creating a boon forone crop; a possible catastrophe for another. InIndia, it can be challenging enough for a small ormedium size farm to keep track of the weatherand imminent changes, never mind longer-rangeforecasts that affect an entire growing season oryear. For small and medium size farms, gainingaccess to accurate and localized weatherinformation, determining the subsequentimplications, and translating that into action onthe farm can be a challenge, especially whenmanpower, technology and finances are limited.

The extraordinary availability and adoptionof mobile phones in India has created an incredibleopportunityfor rural farmers to have access tocertain technical advantages that once wereaccessible only by the largest and most robustcompanies in the industry. According to the TelecomRegulatory Authority of India, as of 1 July, 2012,approximately 75% of the total population and39% of the rural population use a cell phone ormobile device, making the opportunity to accessreal-time weather data a reality for many smallerfarms.

The opportunity to help smaller scale farmsleverage weather intelligence is not goingunnoticed. India-based Express Weather, forexample, has partnered with global weatherprovider CustomWeather (based in the US) to createa customized weather suite at the farmlevel.Farmneed, an affordable, weather-linked,customized solution that is delivered via mobiledevice, is designed specifically for small andmedium farms. The service keeps farmers apprisedof localized weather as well as providing decisionsupport as to how it affects their activities. The

service accounts for geographic location, type ofcrop, crop maturity period, and a host of othercriteria. Customized disease alerts and advisoriescan also be implemented. Results include improvedefficiency in areas such as sowing, irrigation,pesticide application and disease control, andfertilizer application.

Express Weather CEO Angushujyoti Dasstates the situation plainly. “Farmers simply cannotafford to be unaware of weather issues. Rains,wind direction, soil moisture, dew humidity, etc.all play a crucial role in a successful crop, fromtime of sowing to cultivation and harvest. Thereforeit is important to develop multiple weather linkedpractices in agriculture in India.”

Glyphosate price increase boosting up Chinesecompanies’ share price

Due to continued glyphosate price increase, shareprice of listed companies in relation to glyphosatebusiness have recently risen up against stockmarket. These companies include JiangshanAgrochemical, Liuguo Chemical, Wynca, YangnongChemical, Sanoda, etc.

Glyphosate price started to go up since lastAugust and has increased quickly this year. Atpresent the price of glyphosate original powderstays at around Yuan 27,000/ton, which is Yuan6,000 up over the price of Yuan 21,000/ton inAugust 2011, being nearly 30% up. Since 2012, theprice went up approximately by Yuan 3,250/ton,which is 15% up.

As of 16th July, glyphosate price ex-worksranged between Yuan 27,000/ton and 28,300/ton,which is Yuan 1,000 – 2,300 up in one month timeover the ex-works price of Yuan 26,000/ton in earlyJune. According to statistics, the glyphosatecapacity increased by 22% while price went up,there has been a continued short supply.


Glyphosate experienced a price hike in 2008,at that time all glyphosate producers in Chinaexpanded their capacity, which then resulted in anoversupply situation with the price slumping fromthe peak of Yuan 120,000/ton in 2008 to Yuan19,000/ton in the first quarter of 2009, hence fallinginto a 3-year long phase of adjustment.

An analysis from securities experts showsthat the total glyphosate capacity under normaloperation in 2011 was roughly 800,000 tons whilethe capacity which was shut down for 1 – 2 yearsand above 2 years amounted respectively to 140,000tons and 70,000 tons. Once glyphosate price startsto shoot up, the capacity in shutdown at presentwill be resumed. In case of continuedimplementation of stringent environmentalregulation, glyphosate price will be likely to breakthrough Yuan 30,000/ton (13% rise), or may evengo up to a maximum of Yuan 34,000/ton (28%rise); but in case of lack of environmentalenforcement to waste water control which resultsin resumed production by environmentally non-conformable producers, glyphosate price maywander

(Source: CNAGRI.COM)

BAYER CROPSCIENCE

“Agriculture worldwide needs new solutions”Scientists call for urgent turnaround in weed-control research

Growing weed resistance in all major productionareas of the world / More than 25-year lull inbringing herbicides with new modes of action tomarket

Increased research in weed control is urgentlyrequired now to address the severe agriculturalproblems of today and tomorrow. This was afundamental consensus among all participants ofa two-day symposium in Frankfurt and Monheimorganized by Bayer CropScience. Sixteen renownedexternal participants, among them the Nobel Prize-winners in Chemistry Professor Robert Huber andProfessor Hartmut Michel, discussed possiblesolutions and ways forward with some 40 expertsfrom Bayer CropScience.

“For over 25 years no herbicide for broad acrecrops with a new mode of action and commercialrelevance has been discovered and brought tomarket by the global crop science industry,” saidDr. Hermann Stübler, Head of Research Frankfurtand Weed Control Research at Bayer CropScience.“There is tremendous selection pressure forherbicide resistance in weeds in all major rowcrops, and options are shrinking. Weed resistanceis a growing problem that is changing agronomicpractices and threatening the long-term viabilityof economical weed control,” added ProfessorStephen Powles, Director at the University ofWestern Australia.

The objective of the symposium was to discussoptions for an urgent turnaround in weed-controlresearch. For this purpose, the participants workedin groups on different topics such as how to increaseour understanding of plants as whole systems;focusing on new ways to discover new herbicidemodes of action and improve chemical leaddiscovery; and defining collaboration opportunitieswith leading institutes. The successful moderationof the workshops and the resulting recommen-dations were thanks to the personal commitmentof Professor Herbert Waldmann, Director at theMax-Planck-Institute (MPI) for MolecularPhysiology, Professor DetlefWeigel, Director at theMPI for Developmental Biology, and two pioneersin plant molecular biology and founders of severalbiotech companies, Professor LotharWillmitzer,Director of the MPI for Molecular Plant Physiology,and Professor Marc Zabeau, Head of the TechnologyTransfer Office at the University of Ghent.

As Professor Willmitzer stressed in hispresentation of the results, “The need for newherbicides with alternative modes of action and/or resistance breaking capabilities is more urgentthan ever. This could be achieved by increasingthe efforts towards research into plant systemsbiology and systematically screening for novel invivo phenotyping technologies followed byelucidating the underlying molecular targets andpathways. This scientifically challenging task couldbe addressed via innovative collaboration models,for example by setting up science hubs at scientific


hot-spots with resources shared with public researchorganizations, such as the MPI. We have to lookat new sources for novel compounds, includingnatural products, and engage in further dialog withour health care colleagues. Another innovationsource would be the development of truly synergisticformulations combining herbicides with novel modesof action.”

(Source: Bayer Crop Science Press Release)

Starpharma and Nufarm Sign Crop ProtectionAgreement

NufarmLimited, via its subsidiary Nufarm AustraliaLimited, and Starpharma Holdings Ltd announcedthe signing of an agreement under which the partieswill apply Starpharma’s Priostar® dendrimertechnology to develop innovative crop protectionformulations for Nufarm’s product portfolio.

“We are very pleased to be working withNufarm in this way,” commented Dr Jackie Fairley,CEO Starpharma. “This agreement builds onprevious collaboration between the companies andwe are excited about the opportunity to work withNufarm to develop innovative and improvedproducts.”

“This collaboration with Starpharma reflectsNufarm’s renewed emphasis on technologicalinnovation,” said Lachlan McKinnon, NufarmAustralia’s General Manager. “We are seekinginnovative ways to differentiate our products sothat growers are offered a wider range of controloptions tailored to their particular needs.”

Starpharma’sPriostar® dendrimer technologyhas wide applicability in the agrochemical sector.Through its own internal research programStarpharma has previously established thatpotential benefits of dendrimer to agrochemicalformulators and end-user growers include:

More concentrated formulations to reducetransport costs;

Reduction in solvent loading; Improved overallactivity; and Increased adhesion, to reduce lossesdue to rain run-off, and the need for multipleapplications.

The terms of the agreement were not discloseddue to commercial confidentiality restrictions.

(Source: Press Release Nufarm, Australia)

WYNCA CHEMICALS

Wynca sales up 33% in Q3 Chinese agrochemicalcompany Zhejiang Wynca Chemical Group(“Wynca”) sales rose by 32.5% in the third quarterof 2012 compared with the same period last yearto Yuan 1,566 million. The net profit attributableto stockholders of listed company reached Yuan35.45 million.

For nine months, due to upward spiral onprofit of glyphosate, sales of Wynca rose by 25.5%to Yuan 4,535 million. The net profit attributableto stockholders of listed company reached Yuan 7.7million, the company succeeded in turning thebusiness around.

The company said, its profitability improvedowing to the higher price of its main product,glyphosate, and company turns losses into gains atthe end of the third quarter. The company expectsthat net profit attributable to shareholders of listedcompany will increase over 50% for the full year.

Wynca is a national leading technicalglyphosate producer. The company tops China’sagrochemical sales ratings on several consecutiveyears. In AgroChemEx 2012, the company won theResponsible Care Award once again.

US

Pesticide News Story: Azinphos-Methyl UsesCancellation September 30, 2012; Use of ExistingStocks Allowed through September 2013

For Release: August 30, 2012

After considering comments from growers andother stakeholders, EPA has completed a final risk-benefit analysis for the remaining uses of theorganophosphate insecticide azinphos-methyl (AZM).AZM can present health risks to workers and cancause negative ecological impacts, while effectivealternatives to this insecticide are available togrowers. EPA has decided to maintain the September


30, 2012, effective date for cancellation of theremaining uses of AZM, on apples, blueberries,sweet and tart cherries, parsley, and pears.

Due to unusual bad weather conditions in2012, EPA will modify the cancellation order toallow growers to use only existing stocks of AZMin their possession for another year, throughSeptember 30, 2013. All the required mitigationmeasures now reflected on AZM labeling will remainin effect during this use. Distribution or sale ofAZM after September 30, 2012, remains prohibited. This decision will not result in greater use of AZMthan originally anticipated, and provides a saferalternative to disposal arrangements.

First registered in 1959, AZM has been usedto control insect pests on a wide variety ofagricultural crops and on ornamentals, tobacco,and trees. In the late 1990s, EPA began reevaluatingAZM with the full involvement of a wide range ofstakeholders. In 2001, certain uses wereimmediately canceled or phased out over a four-year period because of concerns regarding workerhealth and negative ecological impacts.

In 2006, EPA announced a final decision tophase out the remaining ten AZM uses in threephases, with the last uses ending September 30,2012. This phase-out helped facilitate the transitionto safer alternatives, and includes mitigationmeasures such as reduced application rates andbuffer zones around water bodies and occupieddwellings. In July 2012, EPA released and soughtcomment on an updated grower impacts assessmentfor the remaining uses of AZM, which has beenuseful to the agency in developing this final decisionon AZM.

EPA’s final AZM risk-benefit analysis will beavailable on the azinphos-methyl regulatory actionspage, and in docket EPA-HQ-OPP-2009-0365 atwww.regulations.gov. Further information isavailable in AZM docket EPA-HQ-OPP-2005-0061at Regulations.gov.

INDIA

An expert committee today told the Supreme Court(SC) that use of pesticide Endosulfan may be allowed

for next two years only to exhaust the existingstock and the raw material used for its production.

“The Ministry of Agriculture informed that inIndia, if no further import of raw material is allowed,the existing stock should be depleted within a periodof two years after its manufacture.

“Taking into consideration all these facts, theCommittee felt that that to exhaust the availablestocks of the raw material, manufacture and useof Endosulfan may be permitted for a total periodof two years,” the report, filed before a Bench ofjustices Swatanter Kumar and Madan B Lokur,said.

The recommendations of the expert committee,headed by Indian Council of Medical Researchscientist R S Dhaliwal, would now be considered bythe court on November 29.

The panel, in its report, said, “Themanufacturing and marketing companies shouldbe asked to ensure to completely exhaust theavailable raw material during this period and ensurethat that this pesticide is fully utilised in accordancewith label claim and good agricultural practices forpest control.”

The court-appointed committee observed thatEndosulfan has “important health hazards/biologicaleffects related to endocrine disruption,carcinogenicity, congenital anomalies andreproductive and neurological abnormalities.”

The report also said that other pesticides “bynature, are toxic compound” having certain“unwanted effects”.

The court is hearing a petition filed byDemocratic Youth Federation of India that soughta ban on Endosulfan on the ground that it wascausing health hazards including genetic disorders.

EUROPE

An assessment of the socio-economic importance ofazoles active substances in European agriculture

EXECUTIVE SUMMARY (full report downloadat base of page)


The objective of this study is to make anassessment of the socio-economic importance inEuropean agriculture of azoles active substances.In order to evaluate the actual relevance of thisclass of compounds, the economic impact of awithdrawal from use of azoles has been estimated,considering the specific case study of wheat.

The evaluation of the impact has been carriedout by taking into account the future trends of themain variables, which are yield, area, production,trade balance, consumption and self-sufficiency. Thetime frames of the analysis consider a short termimpact analysis (2013) and a long term one (2020).

In the short term evaluation, rates of yieldreduction have been used to estimate the drop inproduction linked to the increased diseasesoccurrence and to related effects that could arisefrom the withdrawal from use of azole fungicides.In the long term analysis, the development ofresistance for the remaining fungicides has beenconsidered along with the yield reduction effect:specifically, in a long term horizon the increasingselection pressure for the remaining fungicideswould result in a lack of protection regardingdiseases and would cause difficulties in managingthem.

The impact analysis carried out by Nomismahas outlined some very clear results.

The projections have shown that, with azolesstill in use, wheat yield and cultivated areas wouldcontinue to increase in the next few years, resultingin an overall growth of wheat production that hasbeen estimated at +5.0% in 2013 and +13.4% in2020. According to these trends, the European Unionwould remain a net exporter of wheat and wouldcontinue to produce more wheat than what is beingconsumed.

The yield of wheat would decrease in thehypothesis that the use of azoles ceased resultingin a loss of production (leaving all other variablesconstant) of 9.8 millions of tons in 2013 (from 141.1to 131.3) and 18,6 millions of tons in 2020 (from152.4 to 133.8). This decreasing production would

not only mean a loss of value of 2.4 billion eurosin 2013 and 4.6 billion euros in 2020. It would alsomean that the European Union would be unable tosatisfy its internal demand and maintain a 100%self-sufficiency rate.

An analysis has also been made of key variables(namely imports, exports, stocks and cultivatedarea) that would need to adjust to compensate forthe reduction of the yield and to guarantee a 100%demand satisfaction rate and a 100% self-sufficiencyrate. While there would be substantial changes inall variables, it is particularly significant (andunrealistic) that the cultivated area would need toincrease by 7.5% in the short term scenario andby 13.9% in the long term scenario.

The role of azoles is highlighted in maintainingthe European Union’s position as a net exporter.The sensitivity of the world price to changes in theEU are also highlighted given that it is a primaryplayer in term of production (it accounts for 21%of total wheat production), productivity (Europeanyield is 5.3 t/ha while the global average is 2.9 t/ha) and trade (it contributes to 16.8% of worldwheat trade flows).

In conclusion, the study shows that theeconomic relevance of azoles in the European Unionis considerable, as their hypothetical loss wouldhave significant relapses on both the domesticmarket and international markets. On the internalmarket, we estimate that without azoles there wouldbe a drop in domestic production, leading to adeterioration of the demand satisfaction rate andto higher prices. This could in turn imply that theEuropean Union could cease to be a net exporterat world level, bringing into question the possibilityof the other big wheat supplier (North and SouthAmerica, Australia, Russia, etc.) to be able to satisfythe global demand. This would increase the currentuncertainty concerning global food security, bringingfurther consequences – which have been prominentlyemerging over the last years - such as drop instocks, increase of prices and price volatilityupsurge.


WORLD NEWS

VIETNAM

Pesticide use falls within safety margins

The pesticides that farmers are currently allowedto use in Viet Nam do not contain carcinogenicsubstances and the use of pesticides in agricultureis closely monitored, Nguyen Xuan Hong, directorof the Plant Protection Department, said at amonthly meeting to review food safety controls inHa Noi.

Over the last month, he said, the agencyconducted a test on 50 samples of vegetables mainlyeaten raw and found that the trace amounts ofpesticide residue and heavy metals were withinpermitted limits.

Over the last year, the agency has analysed1,545 vegetables samples, and only 12 revealedexcessive pesticide residue, accounting for aminiscule 0.8 per cent.

This figure was relatively low compared to theequivalent ratio in neighbouring countries, likeThailand (10 per cent) and Malaysia (12 per cent).In China, the ratio varied from 2 to 17 per cent.

“Over the next five years, we want to lowerthe ratio to 0.5 per cent,” he said. He noted thatwhile Viet Nam allowed the import of farm productsfrom 59 countries and territories, only 13 of thoseareas had the right to export farm products ofplant origin to use as foodstuffs.

Deputy Minister Nguyen ThiXuan Thu askedrelevant agencies to step up inspections on farmproducts from the countries that had not acquiredsuch rights. By the end of this year, if thesecountries still did not have the right to export suchproducts, Viet Nam would stop importing theirfarm products, she said.

She also asked the department to regularlycheck the quality of pesticides. Once a pesticide

was discovered to be of low quality, its manufacturershould receive a strict punishment such as havingits business licence revoked.

(Source: Vietnam News)

Chinese apples to be checked for pesticides

Vietnamese agricultural officials promised to stepup checks on China-grown apples imported to thecountry after media reports alleged that Chinesefarmers used pesticide-coated papers to wrap thefruit.

At a meeting in Ha Noi, the Minister ofAgriculture and Rural Development directed thePlant Protection Department to promptly haveofficial information regarding the tainted wrappingpaper of Chinese apples. Teams may be sent toChina for trustworthy information.

Increased checks on Fuji apples importedfrom China should be an urgent task, MinisterCao DucPhat said.

Chinese media reported last week that papersused to wrap the apples were coated with thepesticides Tuzet and arsenic fungicide, which causeharm to human health.

The pesticides are meant to protect the surfaceof the apples and keep out diseases that could hurtthe crop yield.

The department’s director Nguyen XuanHong said wrapping apples from the time they areyoung until they are ripe was common, but keepingthem in pesticide bags was barred.

He also said Chinese officials had collected2.7 million fruit wrapping bags, and closed downviolated bag manufacturers.

in pollen and nectar on treated crops, and ofthe pyrethroid were based on spraying guidelines.


Bees exposed solely to imidacloprid showedreduced efficiency at foraging while those exposedto cyhalothrin only showed greater death rates –more bees were found dead within the nesting boxesthan otherwise. ‘When the bees were exposed toboth compounds, as we predicted this had a doublewhammy effect, with both reduced foragingefficiency and higher death rates,’ says Gill.

Over four weeks, the control colonies lostaround 30% of the colony; the colonies exposed toimidacloprid lost 41%, cyhalothrin 51% and bothinsecticides 69%.

‘It is clear from our work that long-termexposure is important and that multiple exposurehas an additive effect on the colonies,’ says Gill. ‘Webelieve these factors should be taken into accountby the regulatory authorities when assessingpesticide use in the environment.’ Currently,pesticides are tested only singly and for periods ofup to 96 hours exposure, and in the wild bees willbe exposed to many different insecticides.

Commenting on the study, Norman Carreck,science director of the International Bee ResearchAssociation, says, ‘This is an interesting piece ofresearch that adds to our knowledge base of theeffects of these insecticides.’ However, Carreck saysthat the study faces the same problem as all similarresearch on pesticide exposure investigations. ‘Likeall studies of this nature it is extremely difficultto really understand the sorts of concentrations ofcompounds that bees are exposed to in the wild. Soit is difficult to draw conclusions about thesignificance to the actual effects in the field. Thesituation in the field is highly variable and it isvery difficult to come to a definitive answer.’

ARGENTINA

Argentinean battle over agrichemical use

The conviction of two people in Argentina for illegalpesticide spraying near residential areas could bethe first of many, as activists vow to change theway farmers use agrichemicals. However, the newprecedent is not expected to affect agriculturalproduction, according to government and industrysources.

Francisco Rafael Parra, a farmer, and EdgardoJorge Pancello, a pilot, were both given three yearsuspended sentences. The two were convicted ofspraying pesticides over residential areas close tothe Ituzaingó neighborhood, in Córdoba province,in one of the most productive agricultural regionsin South America. They plan to appeal. A third manwas acquitted.

Over the last 10 years Argentina’s GDP hasgrown between 5% and 12% each year and this ismostly thanks to the export of soya bean and grains.‘Every herbicide is toxic if you don´t use it in anappropriate way,’ says Jorge Tezón, manager of thescience and technology department of Conicet, themain funder of science in Argentina. Tezón’s viewis backed up by the official government line. ‘Thisis a case of bad practices; this is not about thechemical composition of the pesticides. Like anydomestic insecticide is toxic if you spray it over aperson for instance.’ He adds that all the productsused in Argentinean fields are certified accordingto national and international rules and should notcause any health damage when used appropriately.

Industry is taking a similar position. JuanCruz Jaime is executive director of Casafe, theAgrohealth and Fertilisers Chamber, an associationof companies that produces agriculturaltechnologies. Jaime says that ‘we focus on goodpractices and we train thousands of farmers everyyear to use pesticides according to law. We don’tknow how widespread these bad practices are inArgentina but we are not afraid of more trials; ifsomebody breaks the rules, they have to pay forthat.’ Jaime also says that there are similarorganisations like Casafe in neighbouring countriessuch as Chile and Brazil following this problem andhe doesn´t know of any similar cases of agrichemicalabuse brought before the courts in Latin America.

However, for environmental and popular movementsthis trial was seen as a test case against theintensive use of agrochemicals that might lead tomore prosecutions. They are convinced that thereis a link between pesticide use and cancer and birthdefects. Avila Vázquez, coordinator of the Physicians


Network of Sprayed Towns, is happy with the court’sdecision and expects further trials in other townsin Córdoba province. ‘Now they can´t spray overschools and towns,’ he says. ‘We will make hundredsof criminal complaints.’ He argues that is not about‘good and bad practices’ but about the system itself,with the use of transgenic grains and huge amountsof herbicides. Vázquez says the intensive sprayingof crops has health consequences: ‘In the last decadespraying has changed the pattern of diseases: youcan see it.’

Casafe says it and other industry organisationsare now working with the government on thedevelopment of new laws to regulate agrichemicals.However, this is still a work in progress. At thesame time environmental organisations are pressingfor tighter laws on the use of agrichemicals.

(Souce: Martín De Ambrosio (RSC)

AUSTRALIA

Diuron product registrations affirmed withsignificant use changes

The Australian Pesticides and Veterinary MedicinesAuthority (APVMA) has announced the outcomesof its review of diuron, a herbicide used for thecontrol of agricultural weeds and weeds and algaein and around water bodies.

“The announcement, affirming the registrationof most diuron products, but with significant changesto their conditions of use, will bring much-neededcertainty to users of these products”, said APVMAspokesperson, Ms Susan Whitbread.

“The restrictions we’ve put in place are veryspecific for individual crops, and in the case ofsugarcane and pineapple, additional seasonal ‘no-spray windows’ apply.

“While the overall changes are complex, theAPVMA has taken a very pragmatic and tailoredapproach to local use and conditions. We have madea considerable effort to develop workable instructionsfor the continued use of diuron, while ensuring wecan effectively manage risks from the use of thisenvironmentally mobile and persistent chemical.

“Some uses, including industrial applicationsand use in non-agricultural situations, citrus, applesand pears, ornamental plants and tropical cropssuch as tea, coffee and pawpaw will no longer beapproved.

“Other uses have been restricted significantly,including reduced rates of application, applicationon relatively flat land, no spraying when heavy orpersistent rain is forecast and spray drift bufferzones. There are further restrictions for higherlevels of application on sugarcane and pineapplesthrough the use of region and season specific ‘no-spray windows’”, said Ms Whitbread.

The APVMA’s review of diuron commenced in2002 because of environmental and human healthconcerns, particularly the potential for diuron tocontaminate waterways through agricultural runoff.

On 28 November 2011, the APVMA suspendedthe registration of selected diuron products—limitingdiuron use across Australia including a ‘no spraywindow’ on a range of tropical crops such assugarcane, tea, bananas, pineapples, coffee andpawpaw-while it considered further information andsubmissions to the review.

“To ensure an orderly phasing in of the newarrangements, the APVMA has issued a permit for12 months, to cover existing stock in the supplychain. This stock can continue to be used inaccordance with the arrangements establishedunder the suspension including a wet season ‘no-spray window for some tropical crops’”, said MsWhitbread.

In September 2012, the APVMA published aDiuron Review Findings Report and followingindustry feedback, has now finalised the review.

CHINA

Pest Menace Threatens China Rice Fields

Weather disturbances and typhoons have causedrice plant hoppers in China’s rice fields to reproducein usually high numbers, making it more difficultfor the agriculture department officials to control


the pest. Local sources say that rice plant hoppershave infested over 17.33 million hectares of ricefields, which is about 50% higher than last year.

The Chinese government has taken steps tocontrol the pest attacks and has asked theagriculture officials to obtain the help of professionalprivate companies to control the pest. Last week,the government announced an additional 200million yuan (about $31.75 million) to the earlierannounced 400 million yuan (about $63 million)to fight pest attacks.

Earlier this month, the Ministry ofAgriculture said less than 5% or about 10 milliontons of this year’s paddy rice production could beaffected by the pest attacks. In July, USDA hadincreased import estimates for China by about500,000 tons of rice in both 2012 and 2013 afterpest attacks were reported in several rice producingregions in China.

(Source: Oryza News)


BIOTECH NEWS

USDA Crop Acreage Report for 2012, confirmsthat US farmers continue to demonstrateoverwhelming trust and confidence in biotechcrops

Global adoption of biotech crops is expected tocontinue to grow in the future, particularly indeveloping countries, where there is a promisingpipeline of new products

Dr. James said that U.S. farmers continue todemonstrate unprecedented confidence in biotech/GM crops, modified through biotechnology. The June2012 USDA Crop Acreage Report shows near orcomplete optimization of the current technology inthe three large-acreage biotech crops – maize,soybean and cotton – first commercialized in theU.S. in 1996.

“Unprecedented high adoption rates aretestimony to overwhelming trust and confidence inbiotech crops by millions of farmers worldwide,”said Dr. Clive James, founder and chairman of theInternational Service for the Acquisition of Agri-biotech Applications (ISAAA). “Farmers are mastersof risk aversion. As soon as biotech crops arecommercialized, their adoption is rapid, leading tonear or complete optimization – the simple reasonfor the success of biotech crops in the U.S., and inanother 28 countries around the world, is that theygenerate significant and multiple benefits byreducing yield loss from insect pests, weeds anddiseases, and also result in substantial savings ofpesticides.”

The June USDA Crop Acreage Report, Dr.James noted, shows a continuing trend to near-orcomplete optimization of the technology in threemajor U.S. crops, with 88% of all maize, 93% ofall soybean, and 94% of all upland cotton plantedto biotech varieties and hybrids featuring the twoprincipal traits of insect resistance and herbicidetolerance.

Since biotech crops were first commercializedin the U.S., and five other countries in 1996,millions of farmers in 29 countries worldwide havemade decisions to plant and replant crops featuringthe technology on an accumulated area of morethan 1.25 billion hectares or three billion acres –an area of crop land 25 percent larger than the totalland mass of the United States. ISAAA data indicatethat, U.S. farmers continued to plant more biotechcrops than any country in the world in 2011 – a total of almost 70 million hectares or 170 millionacres, of which half the maize area, and two thirdsof cotton had more than one trait, generating multiple benefits. In addition to the three principalbiotech crops of maize, soybean and cotton the U.S.also grew half a million hectares of sugar beet (95%adoption achieved in 5 years – the fastest rate ofadoption in the US) and modest hectarages of biotechcanola, alfalfa, squash and papaya. The currentdevastating drought in the U.S., that is badlyaffecting at least half of the maize crop, is generatingincreased interest in biotech drought tolerant maizewhich is currently being tested in extensive fieldtrials. It is premature to comment on theperformance of the biotech drought tolerant maizeuntil the analysis of data from the field trials inthe U.S. is completed later this year. Droughttolerance is an infinitely more complex trait thanherbicide tolerance and insect resistance andprogress is likely to be on a step by step basis.Encouraging results from the 2012 field tests in theU.S. for biotech drought tolerant maize would bea significant step forward to address drought, themost important constraint to increasing cropproductivity globally, to which both conventionaland biotech applications can contribute.

Dr. James said that “the expected plateauingtrend to optimal adoption rates of around 90 percentthat we have seen in the U.S., has also been evidentin other industrial countries like Australia with


99.5% adoption in biotech cotton. Similarly, asexpected, the major biotech crops in principaldeveloping countries exhibit the same trend, againconfirming the trust and confidence of farmers inthe technology. Herbicide tolerant soybean hasvirtually reached 100 percent in Argentina and thelatest ISAAA data for 2011 shows Bt cotton in Indiaat 88%, and biotech soybean in Brazil at 83%.Given that products in mature markets are alreadyplateauing at close to optimal rates, incrementalannual growth in adoption will be more modest andwill be boosted as: 1.) additional hectares are planted,as was the case with total maize plantings in theUS in 2012 (up 5%); 2.) new traits or new biotechcrops are approved; or 3.) new countries adopt biotechcrops.”

Rate and scale of adoption in developingcountries dwarfs that of industrialized nations

Dr. James observed that of the 29 countriesthat had adopted biotech crops in 2011, 19 weredeveloping countries and 10 were industrializednations. China and India lead Asian adoption, Braziland Argentina lead Latin American adoption, andSouth Africa leads adoption on the continent ofAfrica. A growth rate for biotech crops in developingcountries at 11 percent, or 8.2 million hectaresduring 2011, was twice as fast and twice as largeas industrial countries at 5 percent or 3.8 millionhectares.

Developing countries grew approximately 50percent of global biotech crops in 2011 and areexpected to exceed industrial countries’ land areadevoted to the crops in 2012, Dr. James said. Additionally, more than 90 percent of farmersplanting biotech crops worldwide (equivalent to over15 million farmers) are small resource-poor farmersin developing countries, up 8 percent or 1.3 millionsince 2010, he added.

Dr. James said that in the near term, thebiggest driver of global biotech crop adoption willbe Brazil followed by China once approval tocommercialize biotech maize in China is in place,which could be as early as 2013. Brazil, second onlyto the U.S. in total land area planted to biotechcrops, has a science-based, effective and responsible

fast-track approval system for biotech crops andwill also benefit from a rich pipeline of new biotechcrops coming from trans-nationals, public-privatepartnerships and its own public-sector researchinstitution EMBRAPA, Dr. James added. Brazil has already approved, for the first time, a “stacked”biotech soybean tolerant to herbicides and resistantto insect pests and initial commercialization couldbegin as early as the end of 2012 when plantinggets underway in the southern hemisphere. Chinaalready has 7 million small farmers growing biotechcotton successfully and recently assigned priorityfor maize so that China can benefit from enhancedbiotech maize that will increase meat productivityand make the country more self-sufficient for animalfeed. As China is becoming more prosperous, moremeat is being consumed which in turn createsmore demand for the feed crops, maize and soybean.After more than a decade in development, approvalof biotech “Golden Rice,” is expected in thePhilippines in 2013/14. This very important producthas the capability to generate life-savinghumanitarian benefits - 6,000 people a day, mainly women and children, die from complicationsresulting from vitamin A deficiency.

In conclusion, Dr. James noted that on thecontinent of Africa, South Africa has successfullyplanted biotech maize, soybean and cotton for overa decade, and Burkina Faso is cultivating Bt cotton,and Egypt, Bt maize. Several African countries,including Uganda, Kenya, and Nigeria have fieldtrials underway for a range of biotech crops withthe widely adopted and accepted biotech cotton likelyto be the first product to be commercialized. Biotechcrop field trials in Africa include cotton, maize,banana, cowpea, cassava and sweet potato.

(Source: ISAAA )

Scientists torn over Kenya’s recent GM foodbanOtienoOwino

Scientists fear that Kenya’s recent banning of theimport of genetically modified organisms (GMOs)may be a significant blow to progress onbiotechnology research and development in thecountry.


A cabinet meeting chaired by Kenya’spresident, MwaiKibaki, this month (8 November),directed the public health minister to ban GMOimports until the country is able to certify thatthey have no negative impact on people’s health.

In a statement to the press, the cabinet saidthere was a “lack of sufficient information on thepublic health impact of such foods”.

“The ban will remain in effect until there issufficient information, data and knowledgedemonstrating that GMO foods are not a dangerto public health,” it added.

The directive comes three years after thegovernment’s establishment of the NationalBiosafety Authority (NBA), tasked with exercisinggeneral supervision and control of the transfer,handling and use of GMOs.

The NBA board chair, Miriam Kinyua, tellsSciDev.Net that for now, the government directivewill stand. However, she added that researcherswill continue to provide the government withinformation arising from research into GMO safety,so that a possible review of the directive can beundertaken.

Kinyua says biotechnology research in Kenyawill continue, as the ban does not infringe uponexisting research and development activities. Shealso thinks the directive could help intensifyresearch to provide sufficient data and knowledgeon biotechnology.

Richard Okoth, a biotechnology scientist atKenyatta University, Nairobi, feels that thegovernment’s imposition of a ban while continuingto fund research on biotechnology through theNational Council for Science and Technology is acontradictory position.

“The essence of GMO research is to providea product that can complement efforts towardsfood security. This ban will discourage research,as the product for which the research is beingconducted has been placed on import ban,” Okothsaid.

Biotechnology research funding might becompromised, as international donors could bereluctant to provide funds following the ban, headds.

But the African Biodiversity Network (ABN),a regional research network based in Kenya,supports the step taken by the government andcalls for the ban’s strict implementation.

“The ban should be strictly implemented andthe regulatory institutions should be empoweredto enable them do assessment on all imports tosafeguard against the bypassing of the law,” saysGathuruMburu, ABN’s coordinator.

Kenya only has three biosafety officers, andpoor infrastructure and human capacity may makeimplementing the ban very challenging.

(This article has been produced bySciDev.Net’s Sub-Saharan Africa desk.)

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