CHILE
New Ag International JUN/JUL 2020
Chile is an agro-exporting giant in the Southern Hemisphere. In 2018, it exported more than US$17 billion in food, including fresh fruit, processed fruit, wine, salmon, livestock and dairy products. If the forestry sector is added to this, the figure rises to over $24 billion.
Chile is the largest exporter of fresh fruit in the Southern Hemisphere. In 2019, it exported $6.632 billion in fresh fruit. Cherry was the most exported fruit at $1,477 million, followed by table grapes ($1,409 million), blueberries ($693 million), apples ($426 million), walnuts ($426), plums ($358 million) and avocados ($339 million). Processed foods (frozen, dehydrated, juices, preserves), mostly of fruit origin except for tomato pulps and vegetable juices, generate exports of around $1.5 billion each year.
Kiwi fruit
Wine exports exceed $2 billion, produced in almost 110,000 hectares.
There are 342,000 hectares (ha) of fruit trees, with table grapes (47,000 ha), walnuts (40,000 ha), cherries (38,000 ha), apple trees (31,000 ha), avocados (29,000 ha), European hazelnuts (18,000 ha) and blueberries (18,000 ha) leading the way.
A major common element of fresh fruit, processed food and wine exports is that they are produced under irrigation. Of Chile's entire irrigated area of 1.1 million ha, about 430,000 ha are irrigated through pressurized irrigation systems, about 340,000 ha through drip and micro-sprinkler irrigation and about 90,000 ha through sprinkler irrigation, mostly pivots.
Due to severe drought affecting the north-central part of the country over the last five years, fruit crops have been displaced to the south, generating a strong growth in irrigation in regions such as Maule, Ñuble, la Araucanía, Los Ríos and Los Lagos.
Specialties and biostimulants – around $110 million Throughout the world, it is difficult to define the market for specialties and biostimulants. If a space is established between products that are registered as plant protection products (which control pests and diseases) and fertilizers, a thriving sector appears in the middle that we could call specialties.
This sector is made up of biostimulants, micronutrient deficiency correctors (foliar), soil amendments, phosphites, rooting agents, sun damage protectors, soluble fertilizers, soil improvers, dormancy breakers, irrigation adjuvants and biofertilizers. In Chile, this sector is growing at around 10 percent per year and is estimated to reach $110 million in sales to final farmers in 2019.
Industry experts believe this growth is mainly due to the expansion of high-value crops such as cherries and walnuts. The specialties are mostly sold in export fruit trees. Some experts estimate that 93 percent of specialty products are sold in orchards (and vineyards) and only seven percent in extensive crops.
Specialties – a competitive market Some 40 to 45 companies are involved in the Chilean specialty market, divided between manufacturers, importers and marketers. Most products sold in Chile are imported and the companies that represent them usually sell through distribution chains. Some distributors import directly and some importers sell directly to consumers. Local manufacturers engage in similar distribution strategies.
Among the largest companies in this industry is the Chilean company Bioamérica, which distributes products from Futureco (Spain), Valagro (Italy), among others. Martínez y Valdivieso (M&V) is another leading company in this sector.
M&V is the third or fourth largest distributor in the country, but it is the largest in terms of specialization in plant protection and specialty products. It distributes a large portfolio of specialty products such as Yara, Göemar (UPL), Helena Marubeni, Chemie, MIP Agro, Symborg and Total, among many others.
Following the acquisition of Chilean company Chileagro, Adama has gained a significant share of the local specialty market. And not only does it supply the local market, but Adama Chile's R&D department generates biostimulants for Adama's global distribution.
Anasac is the largest Chilean agrochemical company and its specialty area has a strong national presence, especially in seaweeds (Stimplex and Phyllum) and foliar products.
Tattersall is another distributor representing specialties, such as the Daymsa and Albion portfolios.
Compo has always had a leading position in Chile and has participated in the development of numerous specialty product lines: foliar, biostimulants, nitrification inhibitors and slow-release fertilizers, among others.
Stoller is another major specialty company in the country and is involved in many crops and segments.
In recent years, two companies of Japanese origin have generated the main news in the market. One of them is Sumitomo Chemical, which incorporated Valent into its portfolio, a company with great technical leadership, and recently the operations of Nufarm, which has products in high demand in some important fruit trees in Chile. The other is Summit Agro, which has incorporated the representation in Chile, and in some cases, for the rest of the world, of a series of local and international companies of specialties such as Bioagro (chitosan-based products), Summit-Ready, Innovak, BioAtlantis and Plymag. It has also recently signed a distribution agreement with local companies BioNativa and Fitological.
Several international players are successfully participating in the Chilean market, such as Stoller, Compo, UPL, Ibiterra, Innovak Global, Agroenzymas, CPS, Coda (distributed by Agrointegral), Daymsa (distributed by Tattersall), Tradecorp, Ilsa (distributed by Eurochilena), Bioibérica and Adriatica Spa (distributed by Agroconnexion), Atlántica Agrícola (distributed by SQM), Humintech (imported by AM Ecological, distributed by Bayer), Deltachem, Italpollina (distributed by Inpacta), Kimitec (distributed by Quimetal), Seipasa (distributed by Suez Chile), Tessenderlo Kerley, Gowan and Kelp Products (distributed by CALS).
Syngenta also markets some specialty products. Recently, Iansa, the main sugar producer in the country, has incorporated a line of specialties to its input business with products imported from Man Italia and national lines.
There are also local companies that formulate specialties such as Nutrafeed, Aminochem (salmon-based amino acids), Quimetal, Agropuelma, Agrospec, Anasac, Agrosupport, Fertum and Agroadvance, among others.
The market is very dynamic and complex, and new players are added every year. It is estimated the average turnover should be around $2.5 million. And the main players do not exceed $20 million in specialties.
Majority of specialties sold by distribution chain It is estimated that 85 percent of specialty products are sold through distribution companies, although most are imported by other companies. About 20 percent are imported directly by distributors.
Among the main agro-inputs distributors that commercialize specialties are Copeval (the largest distributor overall), followed by M&V (specialized in phytosanitary and specialties), Coagra, Cals, Tattersall, GMT and CPS, among others. The companies that sell directly to the farms are essentially small companies.
Biostimulants are dominant The main categories of the specialty segment are biostimulants and foliar fertilizers that correct micronutrient deficiencies. Between these two categories they concentrate 80 percent of the market. This is followed by soil amendments, phosphites, sunscreens, rooting agents, soil improvers and biofertilizers.
Seaweed extracts dominate among biostimulants. Although there are no exact figures, this market is estimated at $12-15 million. Main players include Anasac (with products from Acadian Seaplants and own formulations), Kelpak (South Africa), M&V (Goemar products), Compo and Chemie, among others. There are also local manufacturers such as Fertum and Agroadvance (Profert product).
Amino acids are the second largest segment of biostimulants in Chile, valued at around $10-12 million annually. Here, unlike seaweed extracts, local production is significant. Aminochem, for example, is a local company that produces amino acids from the salmon industry, one of Chile's main economic activities.
Products to prevent sunburn (sunscreens) have grown strongly in recent years. Initially they were used exclusively on apple trees, but today their use is expanding to cherries, walnuts and other crops. Local companies such as Agrosupport and Suncrops are involved in this type of product, while there are also international product representations such as Surround (by Tattersall). The use of these products has been traditional in apple trees and has grown a lot in cherry and walnut trees. The main products are based on kaolinites and there are also developments based on calcium and boron, among others.
Products to prevent sunburn (sunscreens) have grown strongly in recent years. Initially they were used exclusively on apple trees, but today their use is expanding.
Humic and fulvic acids are widely used in Chile. This market is estimated to be at $8 to 10 million. There are many international players present through local importers and distributors. For example, the Spanish company Daymsa works with Tattersall, Atlántica Agrícola is distributed by SQM. Humintech from Germany has a long-standing relationship with the Chilean company AM Ecological, which recently signed a deal with Bayer CropScience Chile to include its products in its national distribution.
Dormancy breakers – popular in cherry trees With the rapid growth of cherry trees, products used to standardize flowering (dormancy breakers) have had a strong boom. It is estimated this market has already reached $3-4 million. Here, products of Italian origin dominate, such as Erger from Valagro (distributed by Bioamerica), Fiore from Biolchim (imported by Anasac and distributed by M&V) and Siberio from GreenHas Italia (distributed by Chemie). Pro Start Plus from Stoller (United States) is another important player in this market.
Phosphites are around $3 million per year and in many cases are registered as fertilizers. The annual turnover of the rooting market is estimated at $1.5 to $2 million.
Foliar fertilizers Though it is difficult to accurately estimate, local experts believe the market for foliar fertilizers used for correcting nutritional deficiencies is around $40 million. The most demanded products are multi-nutrients, followed by products based on magnesium, zinc, calcium, boron, nitrogen and potassium. Industry experts estimate this segment is led by Bioamerica (with products from Futureco, Spain), followed by M&V (foliar products from Yara), COMPO and Adama, among others. There is a substantial supply on the market of both imported and local products.
An expensive market to develop The specialty market in Chile has several particularities. One of them is that unlike many countries in the world, the vast majority of products can be registered under the fertilizer law, which makes it very easy for them to enter the market. This allows many companies to penetrate the market quickly. But, on the other hand, Chilean export agriculture is highly technical and competitive. Most farms have external advisers who require validation of products before incorporating them into annual programs. This is quite expensive to do, and new players must incur in large investments in testing and validation. The same applies to demand generation, which is quite technical and based on work with advisers, events, field trials and consultancy services.
Soluble fertilizers, a market of 190,000 MT per year The market for soluble fertilizers in Chile involves local producers, which makes it more difficult to establish the exact size of the market. Despite this, different experts consulted agree the market should be around 190,000 MT per year. It is a market that uses crystals mainly, nevertheless the use of granules for fertigation is also common. The market grows essentially linked to the growth of technified irrigation, its increase being in the range of 10 to 15 percent annually, depending on the year.
Total fertilizer consumption in Chile is estimated at 1.1 million tons, therefore the use of soluble fertilizers represents between 15 and 17 percent of the national fertilizer market. Principally, soluble fertilizers are applied in fruit crops. Most of the consulted companies sell about 80 percent in fruit trees, 15 percent in vegetables and only five percent in crops.
The main products used in fertigation in Chile are potassium nitrate, calcium nitrate and potassium sulphate. It is estimated these three products probably concentrate almost 60 percent of the market. There are three producers of potassium nitrate in Chile: SQM, ACF and Cosayach.
Biopesticides – growing strong In 2019, the plant protection market in Chile reached $492 million in producer prices. This sector grows around three percent each year.
Biologicals, on the other hand, are growing strongly and are estimated to have reached $30 million. And they are growing especially in traditional agriculture as organic farming in Chile is quite small. It is estimated there are 174,000 ha under organic production, but a large part of this figure corresponds to the collection of wild fruits and grasses. “Commercial" or "business-oriented" organic agriculture does not exceed 15,000 ha. And it is led by blueberries, vines and apple trees.
It is estimated the market for biopesticides is already over $30 million. New products are entering the market every day, and in 2019 alone there were 37 applications for biopesticide registration in Chile.
The largest market for phytosanitary products in Chilean fruit growing relates to the control of Botrytis cinerea in grapevines. Traditionally, the biological ingredient used in pre-harvest vines has been citrus extracts. But with the evolution of the market, new biological products have emerged based on Bacillus, tea tree extracts, botanical extracts and also mineral products. These last years have seen an intense drought, which on the one hand has reduced the emergency pre-harvest applications in vines, but on the other, it has been good years to test biological products. In dry years, farmers have dared to try biopesticides because pest and disease pressure has been low and when they see their efficiency, they are willing to incorporate them into their frequent management programs.
At a product level, microorganism-based products dominate the market, followed by botanical extracts. The use of semiochemicals is small and there are companies such as UPL that lead this segment. In macrobials: pollinators and beneficial insects, there are international companies operating in the Chilean market such as Biobee, Koppert and Biobest. Domestic companies such as Anasac Xilema and Biocruz are also involved.
In the biopesticide market, the largest company is M&V, whose biological portfolio should represent about 25 percent of the Chilean market. M&V deals with citrus extracts, biopesticides, botanical and semi-chemical extracts from various national and international companies and uses the full power of its technical team and network of branches throughout the country. Of the four largest distributors of agricultural inputs in Chile, M&V is the most specialized in crop protection, biological and specialty products.
At product level, biopesticides based on microorganisms are leading, and despite the fact it is difficult to access statistics, industry sources maintain the most sold products are Bioinsumos Nativa's Mamull bactericide, Bayer's Serenade, Timorex Gold marketed by Syngenta, and Chemie's BC1000 citrus extract, among others.
Several Chilean companies participate in this market. Historically, the best known is Bioinsumos Nativa, which emerged in 2002 at the University of Talca and today exports to several countries around the world. This company centres on the development, production and commercialization of organic agricultural inputs by collecting native microorganisms in Chile. It has launched products based on trichoderms, microbiological bactericides, bactericidal-insecticides and insecticides.
ANASAC has always incorporated biologicals into its portfolio. A few years ago, they bought the macroorganism company Xilema; they are also supporting local universities new product development and recently they signed an agreement to distribute biopesticides from the U.S. company Marrone.
Chemie is a Peruvian-Chilean company, a pioneer in the development of citrus extracts in the country with its BC1000 product. It currently markets its own products and represents international companies.
Fitological is another Chilean biotechnology company that has begun exporting to other countries. In its short history it has managed to develop an interesting line of biostimulants, foliar fertilizers, pruning pastes, plant extracts and insect attractants.
Botanical Solutions is another Chilean company that has developed a very innovative technique to develop an organic fungicide from the quillay tree (Quillaja saponaria) that controls Botrytis cinerea. The product is patented in the United States, and in 2017 they signed a distribution agreement for their product BotriStop with Syngenta.
Biopacific is another university spinoff that was born in 2007 and formulates biocontrollers, microbial inoculants and biofertilizers. It is related to Manvert of Spain and continues to develop innovative products for the local and Latin American market.
Gowan entered the Chilean market through the acquisition of Agrotechnology and has an extensive portfolio of biological products, including the fungicide EcoSwing from the Colombian branch Ecoflora.
Some biological input startups have recently raised capital, such as Polynatural, a company that developed an edible coating based on natural extracts and vegetable polymers that extends the life span of fresh fruit post-harvest. In a round led by ChileGlobal Ventures, a branch of this venture capital fund was joined by Alerce and The Yield Lab, an innovation center in Argentina, to provide $800,000 for the company's expansion.
Probably one of the Chilean biological companies with the greatest potential is Agroadvance. It is a biotechnology company that is developing a powerful pipeline of bacteriophages (bacteria controlling products-based microorganisms biotech) and also fungi controllers. It already has several products on the market and is expected to launch new developments within a year. Recently an important percentage of the company was acquired by M&V.
Future of Chilean agriculture based on sustainability In light of growing competition from neighbouring countries like Peru and Colombia, Chile's agriculture must build on its strengths. One of them is commercial – Chile is the largest fruit exporter in the Southern Hemisphere and many local companies have a global vision and have established farms and distribution schemes globally. Sustainability is the second strength to enhance and develop. Pesticide residue limits opened the way for many sustainable technologies and today many producers are also concerned about soil health, opting for living soil techniques. There are many research centres devoted to micro-organism production, while at the same time much research is being carried out and bio-input and natural pesticides companies are constantly emerging. Organic blueberries are already relevant within the export palette and many companies are devoting large areas to the production of organic fruit. In blueberries, 10 percent of exports are already organic, while in apples it is between 15 and 18 percent. Chile has already reached a significant percentage of its energy production generated by renewable sources (more than 20 percent), developing a thriving sustainable agriculture is the next step.
