Agrochemicals, as we know, are chemical products mainly used in agriculture in order to enhance the productivity, protect them from pests and other harmful agents, improve crop yields, and maintain the quality of food as well as soil. The worldwide market for agrochemicals is witnessing steady growth, mainly due to the expanding commercial cultivation of high-value crops in order to meet the rising demand of food across the globe.
The agrochemicals market is projected to grow at a CAGR of 3.2% from 2015 to reach a projected value of USD 250.5 Billion by 2020.
Based on crop types, the cereals & grains segment is the largest market, followed by fruits & vegetables and oilseeds. However, the fruits & vegetables segment is the fastest-growing crop type in this market. This growth can be attributed to the growing usage of pesticides, especially in the regions where the production and cultivation of cereals, grains, fruits, and vegetables is high, thereby leading to the growth of agrochemicals market for the aforementioned crop types.
What does the geographical scenario of this market look like?
Among regions, Asia-Pacific dominated the global agrochemicals market with a share of 36.7% in 2014, followed by North America and Europe. Country-wise, China and India were the key revenue pockets, owing to their highly populous nature, which in turn calls for high demand for crop yield, thereby leading to an overall demand and growth of the agrochemicals market in these regions. The market in this region is also expected to grow with the growth in investments from various multinational manufacturers, especially in countries such as China, India, and Japan. However, the European market for agrochemicals is predicted to be the fastest-growing market in the coming years, mainly due to the increased focus of farmers towards technology-driven agricultural practices.
What is driving and restraining the market growth?
The worldwide market for agrochemicals is experiencing steady growth, mainly owing to the following factors:
- Increased demand for more food supply due to increasing population
- Advancements in technology in the agricultural industry
- High efficiency and ease of use of agrochemicals
- Rapidly growing greenhouse vegetable production
- Limited availability of arable land
- Shifting R&D investments
Apart from this, introduction of new technologies as well as enhancements in the existing ones and diversified demand and specialized cultivation of food crops is expected to offer lucrative growth opportunities for the market. Moreover, with the rising demand for better-quality agricultural output and need for crop protection solutions, the growing usage of pesticides is expected to boost the market growth even further.
On the flip side, stringent regulatory clauses and toxicity of agrochemicals, rising environmental concerns, and availability of eco-friendly alternatives are the major factors that may restrain the growth of this market in the coming years. Also, improvisation of efficiency and increasing awareness about agrochemicals are the key challenges being faced by the major players involved in this market.
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Key players and strategies adopted for sustenance
Israel Chemicals Ltd. (Israel), Yara International ASA (Norway), The Mosaic Co. (U.S.), BASF SE (Germany), and Dow Chemicals Limited (U.S.) are the key players participating in the global market for agrochemicals. These companies account for about 70% of the total market share, in terms of developments. Agreements, partnerships, and joint ventures & collaborations are the major strategies being adopted by the players in the agrochemicals market. Most of them have been exploring new areas through new product launches, collaborations, and mergers & acquisitions across the globe to cater to the needs of this market.
