The agrochemicals market was valued at US$258.486 billion in 2018 and is projected to expand at a CAGR of 3.83% over the forecast period to reach US$323.825 billion by 2024. Chemicals such as pesticides and fertilizers that aid in crop cultivation in order to meet the global food demand are known as agrochemicals. The growing global population and the steady reduction in the arable land are driving the agrochemical market. Simultaneously, the relative improvement in the farm income over the years along with the favorable agriculture policies is further supplementing the growth of the market. Geographically, the use of agrochemicals in Americas and Europe has been prevalent on account of relatively high farm income in the two regions. However, the Asia Pacific is projected to grow significantly with growing government support, rending fertilizers affordable to even small farmers.
Fertilizers are substances that are added to the plant fields to tackle nutritional deficiencies, thus, promoting crop yields. Agriculture production is increasing globally in order to meet the rising food demand of the growing population. In fact, it is anticipated that the global population will increase to 8.6 billion by 2030 (Source: The World Population Prospects, United Nation) which will further drive the agriculture production activity. Simultaneously, the global trend of urbanization is steadily reducing the arable land available for cultivation. In fact, it is projected that the arable land in the European Union will fall from 106.5 million ha in 2017 to 104 million ha in 2030 (Source: EU Agriculture Outlook, European Commission). As a result, the use of fertilizers in agriculture has increased rapidly because of its ability to significantly improve the crop yield. This is indicated by the fact that fertilizer consumption as a percentage of fertilizer production has increased from 89.307% in 2013 to 94.013% in 2015 (Source: World Bank).
Rising demand for feed and fuel coupled with the supportive government initiatives and regulations are expected to drive the market over the forecast period.
While growing focus on bio-based agrochemicals will offer multiple new opportunities for the market players to expand their footprints in the market.
Fertilizers account for major share of the Agrochemicals market with its huge contribution to the transformation of the agriculture sector across the world.
Fertilizers help the countries that are dependent on imports of food grains to become self-sufficient. Government policies coupled with initiatives taken by enterprises manufacturing fertilizers in terms of creating awareness and technological innovations have further boosted the demand for fertilizers across the globe.
A growing population coupled with the reduction in arable land are some of the major factors driving the demand for pesticides to improve the productivity. It is projected that biopesticides would grow at the fastest rate during the forecasted period owing to the rising demand for natural products, low toxicity and favorable government regulations. However, the demand for organophosphates and neonicotinoids would be severely impacted due to certain regional governments restricting the use of these pesticides. Thereby, affecting the overall agrochemicals market growth.
Cereals account for a significant market share in the agrochemicals market accounting for more than 50% of the market share owing to the increasing expenditure on agriculture activities for harvesting cereal crops.
Rising population across the globe is boosting the demand for agrochemicals to increase the yield per hectare while protecting the food products during the crop lifecycle. Fruits and vegetables is the second largest segment by crop type. An Increased adoption and cultivation of genetically modified oilseeds has also increased the consumption of the agrochemicals for the oilseeds. Increased cultivation of soybean in countries such as Brazil and Argentina is also fueling the use of agrochemicals for good harvest, thus bolstering the market of agrochemicals for the use in oilseed cultivation. The use of agrochemicals for other crop types is also expected to witness a healthy growth over the next five years.
Asia Pacific (APAC) dominates the global agrochemicals market with more than 40% market share with region expected to dominate the market throughout the forecast period.
The agrochemicals market is segmented as North America, South America, Europe, Middle East and Africa, and the Asia Pacific. North America held a significant market share in the agrochemicals market owing to the increasing expenditure on agriculture activities and the rising use of herbicides in the region. The rising population in the Asia Pacific region is driving the demand for food products, which in turn is boosting the demand for agrochemicals to increase the yield per hectare while protecting the food products during the crop lifecycle. Environmental regulations concerning the use of pesticides in the European region might impede on the growing demand for these chemicals over the forecast period. Agriculture has been an important part of the U.S. economy. As per the USDA ERS, the food, agriculture and related industries contributed more than US$990 billion to the U.S. GDP in 2015, a 5.5% share of the country’s GDP.
The Asia Pacific agrochemicals market is also estimated to grow with the highest CAGR among all the regions. A rising regional population coupled with the presence of some of the fastest growing economies in the world is significantly driving the demand for agrochemicals for fulfilling the rising food demand and crop yield.
Industry and Supplier Outlook
The agrochemicals industry is facing with multiple challenges currently such as reduction in arable land, land productivity, water contamination due to excess chemical usage, ineffective irrigation in developing countries, and farmer’s debt among many others. The foremost factors affecting the agricultural land are land degradation, urbanization and the booming construction industry. Food is an essential commodity, so its demand is inelastic. As a result, the industry is witnessing certain revolutionary trends worldwide. Vertical farming is one such method that has the potential to revolutionize the agriculture by improving productive, efficient resource utilization and a novel solution to the reduction in arable land. Similarly, promotion pf agricultural machinery by various governments is another trend that is helping the industry move towards a positive growth.
The major challenges faced by any company in the agrochemicals market are the fluctuations in the prices of the raw materials and various macroeconomic factors affecting business operations. In order to gain a competitive advantage over their competitors, companies are employing various strategies to overcome these hurdles and exploit the market potential posed by agrochemical solutions.
*Companies profiled but not limited to
Major companies profiled as a part of this study include BASF SE, The Dow Chemical Company, Yara International ASA, Bayer AG, The Mosaic Company, Syngenta Crop Protection AG, Israel Chemicals Limited, Nutrien Ltd., Sumitomo Chemicals, and ADAMA Ltd. among others. Other players have been discussed in different sections such as competitive intelligence and market dynamics.
The agrochemicals market has been analyzed through the following segments:
By Crop Type
Fruits and Vegetables
Middle East and Africa