The global agrochemicals market is projected to register a CAGR of 4.0% during the forecast period (2021-2026).
The COVID-19 has affected the production and supply of the agrochemicals market. The global pandemic has impacted the proper functioning of various industries across the globe, and it affected the functioning of the agrochemicals market. In terms of supply, a short-term shortage of migrant laborers amidst distribution bottlenecks created a wide gap between the number of workers required for the production of agrochemicals and the ones available. The production of crops also decreased due to the unavailability of laborers in large-scale plantations, which has reduced the demand for agrochemicals during the pandemic.
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 market.
Asia-Pacific dominates the market, while North America is anticipated to be the fastest-growing market. Price premiums and innovative eco-friendly production methods are emerging steadily in the agrochemical market. There is an increasing need to balance the judicious use of the best chemicals and minimizing the impact of that use.
Key Market Trends
Increasing Adoption of Biopesticides
With rising awareness regarding the impact of chemical insecticides on the health of humans, the gradual shift towards the usage of biopesticides by farmers has been observed therefore, biopesticides are gaining popularity. The segment is likely to witness a significant growth rate in the forecast period. This kind of growth is supported by the fact that most countries amended their policies to minimize the use of chemical pesticides and instead promote the use of biopesticides. Owing to a smaller number of regulations on product approvals and the low cost of product development, biopesticides are being largely adopted by the agriculture industry. It takes nearly USD 250.0 million and 10 years to develop new pesticide products. In addition, it takes 12-13 years and roughly USD 130.0 million for the development of GM crops. However, a biopesticide or biological can enter the market in 3-5 years, with roughly USD 3.0-5.0 million development cost, which is impacting a positive trend of the biopesticides market across the globe.
Asia-Pacific Dominates the Market
China accounts for the largest share among other countries in the global fertilizer market. Chinese consumption of inorganic N, P, K fertilizers is reducing, owing to the reduction in cropland area. The cropland area under fruits and vegetables is increasing, while the area under cereals is decreasing. The Chinese fertilizer market is growing at a very slow and steady rate, owing to the government regulation of zero residues of inorganic fertilizer in the food crops since 2013. The large production of cereal crops, like rice and wheat in India, is the major factor supporting market growth. Consumption of pesticides is rising steadily in India. In 2018-19, 72,515 metric ton of pesticides were used by farmers all over the country. Data reveals that only eight states account for more than 70.0% of the total pesticide consumption in India. With a growing emphasis on the environment and sustainability, the various governments in the region are enforcing clean production and environment-friendly agriculture policies, which may led to a decline in synthetic pesticide usage in the country. However, the government has encouraged the use of microbial pesticides, which is expected to grow at a rapid rate in the coming years.
.The agrochemicals market is fragmented, with major players including Bayer CropScience, Adama Agricultural Solutions, Yara International ASA, BASF SE, Corteva Agriscience and Nufarm and many others.. New product launches, mergers & acquisitions, and partnerships are the major strategies adopted by these leading companies in the market. These companies are also focusing on making an investment in innovations, collaborations, and expansions, in order to increase their market share.
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