Q: The leaves of my hibiscus are eaten through like eyelet lace. What could chew them up so?
A: It’s hibiscus sawfly damage. Early on a humid morning you can find the greenish larvae on the backside of leaves, chewing between veins.
A sawfly adult is a primitive wasp-like insect. The females have a saw-like blade at the tip of the abdomen that is used to cut slits into plant tissue into which they deposit eggs. The resulting larvae, since they are not caterpillars, are not affected by the organic caterpillar insecticide, B. t. (Dipel, Thuricide, etc)
Contact insecticides like insecticidal soap (click for sources), permethrin (click for sources) and carbaryl (click for sources) offer good control if sprayed on the entire plant in May and June. Imidacloprid (click for sources) is a systemic insecticide which can be applied to the soil around the tree before feeding activity is noticed. Both insecticides, however, are moderately toxic to fish. In your specific situation consider using insecticidal soap every seven days during the few weeks in which the sawfly larvae are present.
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