"The Agrochemicals Market is estimated at USD 226.3 billion in 2022. Further, the market is expected to grow from USD 229.8 billion in 2023 to USD 294.7 billion in 2030 at a CAGR of 3.62%.
Agrochemicals Market Market Overview
Agrochemicals are chemical products used in agriculture to enhance plant & crop growth and safety and control the population of agricultural pests. The types of agrochemicals include pesticides, insecticides, herbicides, fungicides, rodenticides, molluscicides, nematicides, fertilizers, soil conditioners, and limiting and acidifying agents. Agrochemicals play a vital role in modern industrialized and intensive farming methods, making the growth of foods on previously uncultivatable land possible and maximizing the yield of a given soil. Agrochemicals have come a long way since the creation of synthetic fertilizers, and the need to better understand and optimize both the agrochemical production process and the formulation of agrochemicals is becoming more apparent. For key market players, the agrochemicals industry outlook may seem daunting, but many changes underway are likely to transform agrochemicals completely.
Latest Trends in Agrochemicals Market
Accelerated Pace of Change Within and in Adjacent Markets:
Using advanced robotics, drones, machine learning algorithms, and biologicals would lead to lower use of crop protection products. These new methods & products can enable higher efficiency at lower R&D and capital intensity, at least in the short term. Similarly, gene editing reduced biofuel demand (due to electric vehicles and fuel efficiency mandates), alternative meats and improved animal digestion (leading to lower grain demand), and indoor farming (which minimizes the use of agrochemicals in growing fruits and vegetables) could effectively diminish long-term demand for crop protection chemicals.
Over the past few years, large agrochemical firms have undergone major portfolio optimization and consolidation through the M&A route. Apart from enhancing the current product portfolio, many of these M&A deals have also sought to increase the acquirer companies’ geographical presence, especially in geographies where these companies didn’t have a good distributor network. Major agrochemical producers have already moved from being simple providers of farm inputs to complex providers of integrated product offerings, which have digital as a major component.
Global Agrochemicals Market – By Region
Driving Factors
Growing Demand for Food Supply Due to Rapid Growth in Population:
The rising population, need for food security, high demand for food grains, and shrinking arable land are expected to drive the demand for the agrochemicals market. The rapidly growing population across the globe is increasing the burden of higher yield on existing land and its unnecessary expansion to satisfy the growing demand for food. The world's population is estimated to rise by nearly 2 billion in the next 30 years, from 8 billion to 9.7 billion in 2050 and could peak at nearly 10.4 billion in the mid-2080s.
Over the past few years, the global food supply chains have changed dramatically, and intensification has led to high inputs of nutrients in the form of agrochemicals, leading to higher production and supply. Food safety and self-sufficiency are important factors for any country's growth and progress, and to achieve this target, most countries heavily depend on multiple agrochemicals.
China, South Korea, and Taiwan experienced enormous changes in food demand, with animal-based products accounting for a much larger proportion of the national diet. This represents a significant opportunity in East Asia for agrochemical manufacturers to meet the growing agrochemical demand to support a paradigm shift from traditional cereal-based farming towards commercialized agriculture focused on livestock, dairy products, vegetables, and fruit.
Market Challenges
Rising Raw Material & Shipping Costs:
The agrochemicals industry uses many crude oil-related raw materials like chlorine, yellow phosphorus, and bromine, among other substances. These are essential raw materials to produce agrochemicals; even in small doses, these raw components are highly potent and produce the best outcomes. Nonetheless, unpredictable crude oil prices impact agrochemical manufacturing production and pricing. The top three agrochemical manufacturers in the world are the U.S., Japan, and China, with China producing 90% of the world's agrochemical raw materials.
Companies Mentioned
Bayer AG
BASF SE
Clariant AG
UPL
Compass Minerals International
Nufarm Ltd.
Sumitomo Chemical Company
