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Agrochemicals Market Growing at a CAGR of 3.4% | Key Players are BASF, Yara International, Compass Minerals, and Syngenta

Agrochemicals Market Growing at a CAGR of 3.4% | Key Players are BASF, Yara International, Compass Minerals, and SyngentaMarketsandMarkets™The demand for fertilizers and pesticides has been growing in the Asia Pacific region due to the increasing investment of overseas business lines in agricultural inputs to exclusively meet the demand of crop growers for attaining export quality.

The global agrochemicals market size is estimated to grow from USD 208.6 billion in 2020 and is projected to reach USD 246.1 billion by 2025, at a CAGR of 3.4% during the forecast. Increasing demand for food supply due to the rapid growth in the human population has triggered agricultural intensification during the last few decades. For addressing the growing food demands, agrochemicals (fertilizers and diverse pesticides) are rigorously used in agriculture, which accomplishes the gap between food production and consumption. However, concurrently unbalanced use of agrochemicals also causes environmental deterioration and poses severe challenges to aquatic and terrestrial ecosystems. Various research studies have indicated that fertilizers and pesticides used in agriculture have been substantially increased in developed and developing countries in recent years for attaining maximum yields of crops.

Agrochemicals Market

COVID-19 impact on the agrochemicals market

The crop protection sector is in huge demand in recent years, with its increasing importance on the growth. This is because it has a lot to do with the well-being of the plants and the consumers. The components that are used in the production of agrochemicals are sometimes chemicals and sometimes biological species, which ultimately help in controlling the pests from damaging the crops or helps improve soil fertility. This results in healthy crop production with no health issues. With these concerns, farmers have started the usage of various agrochemicals to prevent damage and hence, increase productivity. Due to the emergence of the COVID-19 pandemic, there has been a supply chain disruption because of which the agricultural sector had to face problems such as labor unavailability, transportation barriers, restriction for market access, and lack of inventories in some regions. Many fertilizer and pesticide manufacturers were facing issues due to lack of raw material availability, which has led to the reduction of various agrochemical product manufacturing. Post COVID-19, the agricultural activities have normalized, which has helped the companies to deliver products to target locations. Agrochemicals, such as pesticides and fertilizers, play an important role, as they have been able to serve as an important solution for farmers across the globe.

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Drivers: Increasing adoption of agrochemicals in developing countries

Continuous advancements in the technology used in agriculture have led to a shift in farming practices. With the increased export and import of agricultural commodities across different geographies, especially in developing regions, new types of harmful organisms have emerged, leading to an increase in the demand for novel active ingredient products to safeguard crops.

Globalization of the agrochemical industry has a huge impact on the Asian crop protection markets. With the highest rate of population growth, increasing the need for food production, and economic growth, the demand for various agrochemicals such as herbicides and pesticides are increasing. While the demand for food products is increasing in the developing countries of Asia Pacific, the available landmass for agriculture is shrinking due to the increased effect of urbanization that propels farmers to use various agrochemicals to maintain soil health and increase land productivity.

Challenges: Intense competition between players in the market

The market for agrochemicals is highly fragmented, comprising of a large number of big and small players. The majority of players in the market are located in the European region and offer a variety of products. With the growing demand for various agrochemical products, the major players in the market are focusing on R&D investments to launch products, which would cater to the requirements of the consumers. For instance, Compass minerals (US), Bayer (Germany), and Syngenta (Switzerland) launched a range of products to cater to the demand for new and effective pesticides to protect crops from various pests. The huge demand has also aided the growth of the distributors in the market who cater to the demand from niche markets.

Increase in population and the consequent rise in demand for food mterials to increase the demand for agrochemicals.

Agrochemicals play a vital role in crop growth, showing improved performance and noticeable results. Pesticides enable farmers to produce safe, quality foods at affordable prices. They also help farmers provide an abundance of nutritious, all-year-round foods, which are necessary for human health. Fruits and vegetables, which provide essential nutrients, are more abundant and affordable. Grains, milk, and proteins, which are vital to childhood development, are more widely available because of lower costs to produce food and animal feed. The kind of fertilizer needed depends on the crop grown and the nutrient deficits in each specific soil. Different crops remove different amounts of nutrients from the soil. Many farmers use NPK compound fertilizers that provide a combination of several nutrients at the same time. Nitrogen, phosphate, and potash are essential for the production of crops used for food, feed, fiber, and fuel. Hence, the growth in the agrochemical market is fueled by an increase in population and food requirements across the globe.

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Asia Pacific is the fastest-growing market during the forecast period in the global agrochemicals market

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, 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.

The increasing need for food crops in the region has fueled the use of pesticides to enhance crop yield. The use of pesticides is becoming a common practice in India, China, and other less-developed countries in the region, leading to growth in areas where there had previously been very little or no pesticide usage. However, the lack of awareness and advanced technology, adverse socio-economic conditions, and fragmented landholdings are the main hurdles for developing the crop protection chemicals market in the Asia Pacific region.

Key Market PlayersKey participants in the agrochemicals market such as Bayer (Germany), BASF (Germany), Yara International (Norway), Compass Minerals (US), and Syngenta (Switzerland). These players have focused on strategies such as new product launches and expansions to gain a larger market share in the agrochemicals feed market. Some of the other dominant players in the market include Adama Ltd (Israel), Sumitomo Chemicals (Japan), Nufarm Limited (Australia), UPL (India), K+S Group (Germany), and Israel Chemical Company (Israel). The market for agrochemicals for the study has been segmented by fertilizer type, by pesticide type, and by crop type.

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