Agrochemicals

Agrochemicals Market Outlook

Agrochemicals are specially designed products used to enhance the productivity of crops and to protect them from insects, fungi, weeds, and pests. Agrochemicals include acidifying and liming agents, fertilizers, pesticides, and soil conditioners. Increasing pressure on farm yield improvement and declining farmlands is the major reason for the growth in consumption. Agrochemicals help farmers to fulfil demand from the rising population by increasing the amount of cultivation, which subsequently leads to higher returns on investment. Farmers are striving to achieve high quality and nutritive crop production as a result of which there has been a considerable increase in demand for agrochemicals. Growth of the population has led to higher demand for food grains which, in turn is expected to fuel growth of the agrochemicals market. However, the prolonged use of agrochemicals causes ecological and environmental damage, thus reducing its benefits. Agrochemicals can adversely affect the health of consumers, causing diseases such as cancer, autism, asthma, Alzheimer’s, and diabetes. Furthermore, these chemicals may contaminate ground water by accumulating on the land surface. Increasing agricultural and non-agricultural application of agrochemicals is propelling its demand from end-use industries. The key factors fueling growth of the market include the growing population, soil degradation, and high demand for food grains across the globe. The lower price of agrochemicals (pesticides and chemical fertilizers) compared to bio-pesticides and bio-fertilizers is a major reason for its increasing use among farmers. However, availability of various alternatives to agrochemicals such as organic pesticides made from minerals, low toxicity pesticides, bio-pesticides, and bio-fertilizers are is expected to hinder growth of the market.

According to the India Brand Equity Foundation (IBEF), a Trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India, the agrochemical market in India is expected to grow at 7.5% annually due to domestic demand, and reach US$ 6.3 billion by 2020. In India, the consumption of crop protection products in 2016 was below the global average of 3kg per hectare. However, the rapidly expanding population of the country is expected to propel demand for agriculture and create immense growth opportunities for players operating in the agrochemicals market. Asia Pacific is expected to hold a dominant position in the agrochemical market owing to the population growth, the rising demand for food production, as well as rapid economic growth in the region.

Application of Agrochemicals:

• Commodity Chemicals:

These chemicals are manufactured for agricultural and industrial use. Commodity chemicals are usually used in farming and have corrosion action on the exposed part of the human body. These chemicals include by-products and industrial waste such as acidic solutions or dilute caustic.

• Pesticides:

Pesticide is a substance used for destroying or controlling insects or other organisms that cause harm to cultivated plants. These include insecticides, herbicides, nematicides, rodenticides, insect repellants, animal repellants, and fungicides.

• Fertilizers:

Fertilizers are any substance of natural or synthetic origin which are applied to plant tissues or soil to supply nutrients necessary for the growth of plants.

• On-Farm Veterinary Products:

These products are used to nurture animals, which are applied to the skin or administered orally or through injection.

Key Challenges of the Global Agrochemicals Market

• Government Regulations:

The Environmental Protection Agency (EPA) is responsible for regulating pesticides under the FQPA (Food Quality Protection Act) and FIFRA (Federal Insecticide, Fungicide and Rodenticide Act). Agrochemical products need to adhere to stringent regulatory standards to prevent any side effects on the environment and human health.

• Lack of Awareness:

The farmers in remote areas still practice subsistence agriculture and sell their output in local markets. Availability of land for agriculture is decreasing due to growing urbanization and the increasing number of infrastructural projects. This has created awareness among farmers, regarding the use of agrochemicals to help in efficient farming.

• Plant location and transportation:

The manufacturing plant location of agrochemicals is significant in reducing the transportation costs from the plants to clearing and forwarding agents. If the plants are strategically located, supply delays can be avoided and transportation costs of raw materials can be reduced.

• Minimal research and development activity:

The agrochemicals market in India has focused on manufacturing common agrochemicals instead of investing on research and development of new products. The demand for agrochemicals is increasing steadily and hence resulting in the need to manufacture products that benefit the local farmers.

Key Conferences on Agrochemicals:

The objective of these conferences is to offer high quality of education to the participants about latest research related to agrochemicals and newly developed products. The global conferences for agrochemicals held between 2016 and 2017 are listed below:

• 19th International Conference on Plant Protection and Agrochemical Products, 2017, USA
• 19th International Conference on Agrochemicals and Phytohormones, 2017, Cuba
• 19th International Conference on Agrochemicals, 2017, Kyoto, Japan
• International Crop-Science Conference & Exhibition, 2017, India
• 11th International Crop-Science Conference and Exhibition, 2016, Goa, India
• 3rd International Conference On Agrochemicals Protecting Crops, Health And Natural Environment, 2016, New Delhi, India
• 4^th National Conference on Agrochemicals, 2017, New Delhi, India

Key Players in the Agrochemicals Market:

Mergers, acquisitions, partnerships, collaborations, and joint ventures are the most commonly implemented strategies among manufacturers of agrochemicals. For instance, FMC Corporation, a chemical manufacturing company, acquired a significant portion of DuPont Crop Protection business to be divested with the European Commission’s ruling related to its merger with The Dow Chemical Company. In 2017, FMC Corporation generated a revenue of US$ 1.5 billion through this acquisition.

The manufacturers of agrochemicals are focusing on the development of products and implementing new innovations and technology to achieve a better position in the global agrochemical market. In 2016, Syngenta AG, a producer of agrochemicals and seeds, made an investment of US$ 1.3 billion in research and development and launched 16 new crop protection products.

Some of the key players in the global market for agrochemicals include Haifa Group, BASF SE, Syngenta AG, Yara International ASA, Bayer CropScience AG, Zuari Agro Chemicals Ltd., Gharda Chemicals Limited, and Dow Agro Sciences LLC.