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 the rising population demand, 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. Owing to the increasing population, the demand for food grains has been increased, thus driving the demand for agrochemicals to help increase yield of farming, in turn fueling growth of the agrochemicals market. However, the prolonged use of agrochemicals causes ecological and environmental damage, 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 the land surface. The demand for agrochemicals, is however, caused by increasing demand for food products. Increasing agricultural and non-agricultural application of agrochemical products creates a steady demand among industries. The key drivers fueling growth of the market include the growing population, soil degradation, and high demand for food grains globally. The low prices of agrochemicals such as pesticides and chemical fertilizers as compared to that of 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 of minerals, low toxicity pesticides, bio-pesticides, and bio-fertilizers are threats, expected to hinder growth of the market.

According to India Brand Equity Foundation (IBEF), is a Trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India as an Investment Promotion Agency for creating the “brand India”, the agrochemical market in India is expected to grow at 7.5 % annually with a growing domestic demand of 6.5% per annum, to reach US$ 6.3 billion by 2020. In India, the consumption of crop protection products in 2016 was below the world average of 3kg per hectares. However, as due to the increasing population in the country, the demand for food is expected to propel demand for agriculture, in turn creating immense opportunities for growth of the agrochemicals market. Asia Pacific is expected to hold a dominant position in the agrochemical market owing to the highest population growth, in turn leading to an increasing demand for food production and 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. They include insecticides, herbicides, nematicides, rodenticides, insect repellants, animal repellants, and fungicides.

  • Fertilizers:

Fertilizer is any substance of natural or synthetic origin, which is 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

To withstand globally, before producing and distributing their products to end users. For instance:

  • 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 negative side effects on the environment and human health

  • Lack of Awareness:

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

  • Plant location and transportation:

 The manufacturing plant location of agrochemical 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 material can be reduced.

  • Minimal research and development activity:

The agrochemicals market in India has focused on manufacturing common agrochemicals products instead of investing on R&D activities to produce new products. The demand for agro chemicals is relatively increasing hence resulting in the need to manufacture products that benefit the local farmers and acceptable to their agricultural conditions.

Key Conferences on Agrochemicals:

The objective of these conferences is to offer high quality of education to the participants about latest research related to the 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
  • 3rd International Conference On Agrochemicals Protecting Crops, Health And Natural Environment, 2016, New Delhi
  • 4th National Conference on Agrochemicals, 2017, New Delhi

Key Players in the Agrochemicals Market:

Mergers, acquisitions, partnerships, collaborations, and joint ventures are the most commonly preferred strategies adopted by various manufacturers in the agrochemicals market. For instance, FMC Corporation, one of the leading chemical manufacturing companies, acquired a significant portion of DuPont Crop Protection business to be divested with the European Commission ruling related to its merger with The Dow Chemical Company. In 2017, FMC Corporation expects to generate 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, one of the leading players in the U.S., 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.

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