After disruptions in logistics chains and grain prices that went through the roof shortly after the Russian invasion of Ukraine, a different wind is now blowing through the agricultural sector. The mood among arable farmers is not bad, but the shine we saw a year ago has faded somewhat. The major chemical companies notice this when we look at the quarterly reports for the third quarter.
Bayer, Corteva and Syngenta released their third quarter figures last week, and BASF the week before. Three of the four companies paint a fairly clear picture of developments in the global market for crop protection products (GBMs).
Syngenta
Syngenta Group saw revenue decline 2023% in the third quarter of 13 compared to the same period last year, to $6,8 billion. The largest decline was at ADAMA, whose revenue fell 24% to $1,2 billion. In the explanation of the figures, Syngenta says that this decline is largely caused by the reduction of inventories. Significantly fewer GBMs were sold, especially in Brazil. Prices for Syngenta's products are also under pressure. This can probably partly be explained because Syngenta mainly focuses on license-free active ingredients with ADAMA. That is a market where competition is fiercer.
Corteva
At Corteva, net revenues from the GBM business fell 2023% to $11 billion in the third quarter of 1,7 compared to the same period last year. Corteva's largest decline was in the North American market, where net revenues fell 23% to $399 million. The total volume of GBMs that Corteva converted fell by 16% and the price fell by 4%.
BASF
BASF saw sales in the GBM division fall by 19% to €1,7 billion. The volume sold fell by 19% while prices for GBMs were increased by 5%. These higher prices were offset by unfavorable exchange rates. In Europe, the smaller volumes were largely offset by higher prices for the resources. BASF has also raised prices significantly in North America and Asia, but the company has only been able to benefit from this to a limited extent due to unfavorable exchange rates. In South America, sales of GBMs were delayed due to the late start of the growing season in Brazil. Nevertheless, Ebit rose from €1 million negative in the third quarter of last year to €41 million in the plus last quarter.
Bayer
Bayer differs from the other three chemical companies. Here, turnover increased by 25% in the third quarter. On the other hand, prices fell by 24% and the company also had to contend with negative currency effects. Turnover in Bayer's agricultural branch therefore fell by 7% to €4,4 billion. In the herbicide segment, sales fell by 17%, despite the increased volume traded. Bayer's overall result across all divisions is not that bad. Chairman Bill Anderson said during the presentation of the quarterly figures that 'the company is exploring structural solutions'. Splitting Bayer into three separate parts is not an option. One option that is being explored is splitting off either the Crop Science or Consumer Health arm of Bayer.