Agrochemicals are chemical products that have been specially engineered for use in agriculture to increase crop yield and protect crops from pests, insects, weeds, fungi, and other pests. Agrochemicals can be produced in both, chemical as well as biological methods. Synthetic agrochemicals are a threat for the environment and are gradually being replaced by bio-based pesticides and fertilizers. An evolution in synthetic chemical manufacture has vastly improved pesticide processes to accommodate for the enormously growing global population and the consequent increases in food demands. However, it is estimated that up to 40% of the world’s crops are spoiled by plant pests and diseases – even with the effective implementation of pesticides.
The global agrochemicals market is estimated to surpass US$ 103,383.4 Mn by the end of 2027 in terms of revenue, exhibiting a CAGR of 6.2% during the forecast period (2021 to 2027).
Increasing adoption of agrochemicals in developing countries such as India, Egypt, etc. will help boost the market during forecast period. Continuous developments in agricultural technology have resulted in a shift in farming techniques. New types of harmful organisms have emerged as a result of increased export and import of agricultural commodities across various geographies, particularly in developing regions such as Asia, leading to an increase in demand for novel active ingredient products to protect crops.
The rising population across the world, accompanied by rising affluence, is seeing a shift in consumption patterns. There is a need to not just increase production to meet demand, but also to ensure that the nutritional needs of an increasingly affluent population are met. Shrinking arable land and loss of crops due to pest attacks lead to wastage, posing a critical challenge to ensuring food and nutritional security. The agrochemical market is an important agriculture support industry, which boosts the agriculture output. These factors are supporting the growth of the agrochemicals market.
Among regions, Asia Pacific held dominant position in the global agrochemicals market in 2020, accounting for 31.7% market share in terms of revenue, followed by Europe and North America. Being the largest as well as the most populous region in the world, Asia Pacific is one of the key markets for agrochemicals. However, it continues to remain untapped by major market players. The region accounted for almost 30% of the land available on Earth and nearly 60% of the human population, according to the World Bank. To meet the food requirement of this huge population in Asia, the use of pesticides has increased significantly in the region. India, Japan, Australia, and Thailand are the highest pesticide- consuming countries in the world. In addition to this, a decrease in arable land per person in India, China, and Southeast Asia countries is a very serious concern.
Figure 1. Global Agrochemicals Market Revenue Share (%), By Region, 2020
The organic food industry witnessed high growth across the emerging countries such as India, Mexico, Russia, China, and Brazil, with increasing awareness regarding health, environment protection, food safety, and animal welfare reforms. The demand for organic food products is increasing, and according to the estimates of the Organic Trade Association, nearly 81% of the American families reported to be purchasing organic food products at least once a week. The growing market demand for safe and healthy food products and improving per capita income are factors that are estimated to continue driving the organic food industry and increase the usage of bio fertilizers, which, in turn, affects the consumption of chemical fertilizers.
|Base Year:||2020||Market Size in 2020:||US$ 67,854.6 Mn|
|Historical Data for:||2017 - 2019||Forecast Period:||2021 to 2027|
|Forecast Period 2021 to 2027 CAGR:||6.2%||2027 Value Projection:||US$ 103,383.4 Mn|
ADAMA Ltd., Arysta Life Science, Bayer AG, Isagro Spa, K+S Aktiengesellschaft, Nufarm, Nutrien Ltd, OCI Nitrogen, Sociedad Quimica Y Minera De Chile, and The Mosaic Company
|Restraints & Challenges:||
Production of sustainable bio-based agricultural products is expected to drive the market growth for agrochemicals over the forecast period. Due to the toxic ingredients contained in the chemicals agricultural products, their pollution levels are so high that they cause serious and, most of the time, fatal effects to the environment. These negative effects can be experienced from the production of the product to the consumption of the plants that these products have been applied on. Most biological products occur naturally, which reduces the cost of production, resulting in relatively cheaper prices compared to chemical pesticides, whose manufacturing cost is high. This results in the consumer footing the bill at a relatively costlier price. Records have shown that pests tend to become resistant to conventional pesticides, thus proving that it is not a long-term solution, something that never happens with the use of organic pesticides and fertilizers.
Figure 2. Global Agrochemicals Market – Opportunity Analysis
Eco-friendly bio-agrochemicals is the leading market trend nowadays. Associated toxic effects of synthetic agrochemicals are making space for the biological agrochemicals to enter into modern agriculture in recent years. Bio pesticides such as canola oil and baking soda are largely used by farmers to inhibit pest growth without any ecological adversity. Additionally, advancement in modern agronomy has led to the innovation of agrochemicals from several soil-borne pathogens, fungi, and bacteria to promote natural growth and high productivity in plants.
Figure 3. Global Agrochemicals Market Revenue Share (%), By Product Type, 2020
On the basis of product type, in 2020, the herbicides segment accounted for 42.4% of the revenue share. The segment dominated the overall agrochemicals market in the year 2020 and is expected to continue its dominance over the forecast period. Herbicides are used in fields to kill the wild plants, but they keep the crops unharmed. Apart from eliminating weeds, herbicide use reduces erosion, reduces fuel use, reduces greenhouse gas emissions, reduces nutrient runoff, and conserves water.
Global Agrochemicals Market - Impact of Coronavirus (Covid-19) Pandemic
The COVID-19 has a negative impact on the agrochemicals market's production and supply. The global pandemic has an impact on the operation of several businesses around the world, including the agrochemicals market. In terms of supply, a short-term labor shortage combined with distribution obstacles resulted in a large difference between the number of workers necessary for agrochemical manufacturing and those available. Crop productivity has also declined as a result of the lack of laborers in large-scale plantations, reducing demand for agrochemicals during the pandemic.
Key players operating in the global agrochemicals market include ADAMA Ltd., Arysta Life Science, Bayer AG, Isagro Spa, K+S Aktiengesellschaft, Nufarm, Nutrien Ltd, OCI Nitrogen, Sociedad Quimica Y Minera De Chile, and The Mosaic Company.
Agrochemicals are used to manage the agriculture ecosystem and increase the crop yield by decreasing the growth of fungi, weeds, and insects that hinder the growth of agricultural produce. Agrochemical refers to pesticides including insecticides, herbicides, fungicides, and nematicides. It includes synthetic fertilizers, liming and acidifying agents, hormones, and soil conditioners. Agrochemicals also include chemical agents, such as antibiotics and hormones, which are used for livestock.
Surging global population is boosting the demand for food. On the other hand, urbanization is reducing agricultural land, thus driving the need to increase crop production in limited agricultural land. Moreover, rising awareness regarding the advantages of agrochemicals are expected to propel the adoption of agrochemicals throughout the forecast period.
Factors such as continuous advancements in the technology used in agriculture have led to a shift in farming practices. Furthermore, with the course of time, with the advent of the era of globalization, liberalization, and privatization, the manufacturing and service industries became the forefront of employment for the masses and increasingly brought them into the fold of urbanization for livelihood and consumption. This shift required more land to be diverted from agriculture to other commercial and residential uses, and, as a result, it reduced more area from under the fold of agricultural and other related practices. Thus, this trend has increased the demand for more agrochemicals to produce more food in less land.
However, increasing environmental concerns due to prolonged use of synthetic chemicals, rising health-risks caused by high toxicity of such chemicals, and deteriorating quality of air, water, and soil caused by excessive use of synthetic agrochemicals are impeding the global agrochemicals market.
Conversely, increasing cultivable land area for horticultural crops such as fruits, vegetables, and floriculture plants, rising inclination toward organic farming, and growing use of bio pesticides are creating opportunities in the agrochemicals market. Moreover, increasing R&D activities and cutting-edge innovations in farming technologies and growing awareness among farmers about the appropriate use of agrochemicals are creating lucrative opportunities in the market.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.