The 2023 season must really be planned for, as the Russia-Ukraine conflict has divided the western world and Russia. After the conflict, compared with the rapid follow-up actions on oil and gas industries, agricultural companies seem to be more ‘humanitarian’ and have tried to ensure their existing businesses would not be affected. However, new businesses or investments have been suspended.

Syngenta, Bayer and BASF are the three pillars of the top five agrochemicals in the Russian agrochemical market. Syngenta announced a non-stop supply of seeds and fertilizers to Russian farmers; BASF has suspended new business operations in Russia and Belarus but will not shut down existing business activities; and Bayer issued an announcement to stop investment in Russia and Belarus for an indefinite period but has already delivered supplies to Russian farmers for the 2022 season. Bayer will decide whether to supply or not supply for the 2023 season, according to developments to the Russia-Ukraine conflict.

As well as agrochemical companies, among the four major grain vendors, LluisDreyfus has announced its intention to suspend its business in Russia. Cargill and ADM said they would cut down business operations in Russia but will continue to operate “basic” food facilities in the country.

The Russian agricultural market is a vast one, with enormous potential for growth in terms of agrochemical products, likely becoming the world's fifth largest pesticide market. If US and European pesticide companies leave the market, the agricultural materials required by domestic agricultural production may face a shortage. Therefore, existing Russian plant protection product vendors are must assume responsibility to secure supplies of agricultural inputs needed for the country's agricultural production. Meanwhile, a larger market share is allocated to local companies that are ready.

Russia’s local enterprises have been making continuous improvement to their productivity, while the process of product expansion of has accelerated, especially under the present circumstances.

Avgust has three formulation factories in Russia and  Belarus. Its most modern plant is Avgust-Alabuga, which began production in the summer of 2019 and has not yet reached its design capacity. Avgust has significant reserves for increasing its production of formulations, both for itself and for other pesticide companies on outsourcing terms. In addition, Avgust’s Russian-Chinese joint venture, Hubei Avgust Pesticide Co., which is located in Hubei Province and manufactures active ingredients, started production about two years ago. In the near future, the factory will produce more than 30 types of pesticides, but in the meantime, Avgust is expecting timely deliveries from its Chinese partner.

Source: AgroNews