19/Oct/2022

#08

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The export dynamics driving the Mexican biologicals market 

Some industry players in Mexico estimate that the market for biocontrols and biostimulants is worth around U$400 million, but it is still far from reaching its potential. 

F. Aldunate M. 

Mexican Eliseo Santos wanted to join the tomato boom. About ten years ago, in his orchard in Puebla, he started producing this vegetable for export. However, phytosanitary problems hindered his plans. Diseases such as Phytophthora, Fusarium y Rhizoctonia became an obstacle. His first reaction was to tackle them with the chemicals available on the market. "However, with each season, these diseases became more resistant and prevented the fruit from expressing its true potential," says Santos.

That's when he sought to solve the problem at the root. Literally. The farmer looked for a solution based on microorganisms that improved the life of bacteria, fungi and insects that surround the root system of his vegetables and promoted plant resistance and growth. He combined it with his usual products and the results were not long in coming: "It increased the health and production of the plants," says Santos, who now produces tomatoes for export, as well as cucumbers and peppers. The farmer persists in the idea of using biological solutions to new problems: some of his greenhouses suffer from nematodes, those small worms that can be lethal for the root of the plants. Santos is using a formula based on Paecilomyces lilacinus, a fungus that paralyzes the eggs and females of the pathogen. "We have to keep testing, because they are the future," he says.

Santos' story is repeated among producers of avocados, raspberries and other products that have joined the agro-export boom: a good part of the farmers seeking to take their fruits and vegetables to international markets add biological formulations, such as those based on bacteria, fungi and other microorganisms, to solve the problems they face in their crops.

«For every peso spent on biocontrol of pests and diseases, three pesos are spent on biological nutrition and stimulation».

Ignacio Simón, president of the Mexican Association of Bioinputs Producers (AMPBIO)

 

The trend in Mexico, however, is two-fold, reflecting its two main agricultural realities. One is dominated by extensive agriculture of cereals such as corn, wheat, sugarcane, beans and cotton, which are focused on the local market. In the other, a dynamic export sector of higher value products such as avocados, tomatoes and berries prevails. In fact, fruits and vegetables account for most of the nearly US$24 billion in agricultural products exported by Mexico in 2021, according to figures from market research firm FreshFruit Peru, up 10%. They also account for most of the US$200 million that DunhamTrimmer attributes to biocontrol products in Mexico in 2020 and should close the decade at around US$500 million.

However, that is only part of the story. According to Ignacio Simón, president of the Mexican Association of Bioinputs Producers (AMPBIO), for every peso spent on biocontrol of pests and diseases, three pesos are spent on biological nutrition and stimulation. "I don't have exact data, but we are seeing exponential growth," says Simón. "The more than 40 companies associated with AMPBIO generate approximately more than 1,500 direct jobs and more than 5,000 indirect jobs," he adds.

The delay in corn

The dynamic trend, however, does not include extensive crops such as corn, despite its enormous potential. Mexico is the country where corn originated, a cereal to which it devotes seven million of its 22 million agricultural hectares. However, more than 40% of its domestic consumption must be covered by imports. The country is unable to meet its production needs due to its low levels of technification and minimal use of bio-inputs in its crops. Unlike Brazil, where soybean production has been key to the development of the local bioinput industry, Mexico's large-scale extensive crop has been left on the sidelines.

"There's always going to be some corn producer out there, or there's always going to be some wheat producer with ideas of sustainability by applying low environmental impact products," says Oscar Cruz, market development director for bioinput firm Innovak Global, founded 65 years ago and whose biological formulations are distributed in 29 countries. "But the reality is that 95% of the market in this type of extensive crops does not have that objective and production system."

An exception to the use of bio-inputs in corn is the Mennonites, says Ileana Velásquez, director of the bio-input company Biokrone. "They are producers that total several thousand hectares in the country and are important users of biofertilizers," says Velazquez. "However, they don't focus much on biocontrol, as is the case in most of Mexico."

Velázquez points out that, in addition to the difficulties of the registration system for bio-controllers in the country, a cultural change is needed so that bioinsecticides, biofungicides and other biological "cides" begin to be used on a massive scale in the field. She says that in Mexico, "we still like to apply a product and see, 'boom', how the insect dies, how the pest dies, immediately,» she says. «But that's not how bio-controllers work: biologicals are not immediate action, they are more for control, which requires a culture of prevention, a lot of prevention."

In fact, she agrees with AMPBIO that the market for biostimulants and biofertilizers is larger than that for biocontrols. This is evidenced by Biokrone's experience, which, in addition to Mexico, has products registered in eight countries in the Americas and the Caribbean. "Our international demand, mainly from markets such as Brazil, comes mainly from biocontrollers, but in Mexico what is most sold are biostimulants and biofertilizers, under the concept of biofortifiers".

The most advanced crops driving a US$ 400 million market

Cruz explains that the development of bioinputs in Mexico is mainly linked to high-value technified crops whose focus is on exports, starting with avocado, which added exports of US$3 billion in 2021, berries with another US$3 billion and tomatoes, with almost US$2 billion. "These are products that go to markets where there is a willingness to pay for higher process quality, and that allows for greater investment per kilo of production," says Cruz. "Although they have a smaller share of the country's cultivated area, 95% of organic products in Mexico are consumed in intensive crops such as fruit trees that target the international market."

In the last five years, says Cruz, the bioinputs market in Mexico has tripled. According to his own estimates, "it may already be totaling some US $400 million and maintains rates of 15%-20%," says Cruz. "Biologicals are rapidly taking over the market for molecules used in traditional agrochemicals, which are being discontinued due to regulatory issues or market demand."

"Biologicals are rapidly taking over the market for molecules used in traditional agrochemicals, which are being discontinued due to regulatory issues or market demand".

Óscar Cruz, market development director for bioinput firm Innovak Global

 

For example, some insecticides belonging to families such as organophosphates and carbamates are being totally restricted in their use due to their high toxicity and impact on human health. "In the same case are also some herbicides and fungicides, and so we can identify each year more restrictions on their use and more and more international regulations, such as production certifiers to trade in the markets we are targeting," he says.

For Simón, of AMPBIO, the trend of replacing chemicals with biological products, as well as the greater importance of sustainability in the fields, received a recent boost from high fertilizer prices due to the Covid problems and the war between Russia and Ukraine. "It was an issue that favored us as producers and also led to the fact that more people who were growing crops chemically are now wanting to move into biological processes," says Simón.

This has spurred dynamic corporate activity. This is the case of Cosmocel, a firm based in Monterrey, in northern Mexico, dedicated to the production of special biostimulants and high-tech products for agriculture. It was acquired a few months ago by the Iberian Rovensa group.

Read article «Rovensa extends global reach after incorporating Mexican bioinputs giant

A trend in which the government has also played a role, promoting a bioinputs program, with the aim of encouraging agricultural companies to develop their own biological formulations. "But what it has mainly done is to promote 'do-it-yourself' schemes, which encourage very artisanal work, guided by YouTube videos," says Biokrone's Velázquez.

«Mycorrhizae is the is the most popular biofortifier marketed in Mexico, due to a promotional effort by a state research center»

Ignacio Simón, president of the Mexican Association of Bioinputs Producers (AMPBIO)

 

However, Velázquez explains that mycorrhizae have achieved high popularity precisely because of an effort by a government research institution to promote their use. "This is the most popular of the biofortifiers marketed in Mexico," says the director of Biokrone. "It is followed by humics and furbics, composts and amino acids. But it makes it clear that government promotional action remains a key factor."

 

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To request more information or send communications about biologicals, write to contact@biologicalslatam.com.   

Biologicals Latam is a newsletter from Redagricola to provide specialized information on the intense activity that is taking place in the field of bio-inputs for agricultural production. This publication in English and Spanish is a complement to the series of courses and conferences that this media group carries out on the subject.