Pesticide producers profits plummet as Covid-19 hits farming

Pesticide companies saw revenues and profits plunge in the first half of the year as the Covid-19 outbreak took a toll on agriculture.

A farmer in central Ha Tinh Province sprays pesticide on a field. Photo by VnExpress/Duc Hung.

Loc Troi Group Jsc based in the Mekong Delta province of An Giang saw post-tax profits plummet by 55 percent year-on-year to VND116 billion ($5 million), and revenues by half to VND2.2 trillion ($94.73 million).

Ho Chi Minh City-based HAI Agrochem Joint Stock Company reported a 94 percent drop in post-tax profit to VND702 million ($30,230), while revenues fell 77 percent to 181.7 billion.

Techno-Agricultural Supplying Jsc in the southern Can Tho City slipped marginally into the red after achieving profits in the same period last year.

All the companies said sales dropped as many farmers stopped farming because of the Covid-19 pandemic. They had already been affected by saltwater intrusion in rivers and drought.

Agricultural expert Vo Tong Xuan said while it might be bad for business it is good for the country’s agriculture since pesticides have been abused for years.

A report by the World Bank three years ago said 50-60 of Vietnamese farmers use excessive pesticides, some use 5-8 times each season to protect vegetables.

High demand means listed pesticide companies achieved an average profit margin of 25.6 percent last year compared to 17 percent for all listed companies.

If Vietnam continues to abuse pesticides, its produce could only be sold domestically and to China, Xuan said.

The pandemic is a good opportunity for farmers to reduce dependency on pesticides and sell to more difficult markets such as the U.S. and the E.U., he said.

Analysts from FPT Securities Jsc said there is increasing research into organic plant protection products, which could bring about a more sustainable future for the agriculture sector.