In modern farming, agrochemicals are extensively used to neutralize the soil, enhance crop yield, protect crops against pests, and increase plant growth. Various types of agrochemicals are available in the market including herbicides, insecticides, fungicides, and seed treatment chemicals. The first uses of agrochemicals can be traced back to 4500 years when Sumerians used sulfur compounds as insecticides. The demand for agrochemicals is on the rise as the availability of arable land is limited to feed the growing world population. Suitable agrochemicals are thereby used to maximize the use of agricultural land. The recent procurement market intelligence report from SpendEdge on the global agrochemicals market estimates the market to be worth $52.2 billion.
Increase in restructuring efforts
There is an increasing trend of restructuring efforts in the agrochemical market as leading players strive to obtain the market leader position and expand their product portfolio. The restructuring efforts have also been helped by increasing regulatory complexity, low ROI on R&D investment, and tough market conditions. For instance, market leaders, Dow Chemicals, and DuPont announced their merger in 2015 and completed the activity in 2017. The combined entity would create an agribusiness portfolio that is worth more than US$17 billion. It also helps the buyers in the market as they can purchase all their requirements from one single vendor.
Development of insect-control traits
One of the major concern for agrochemical manufacturers is developing chemicals which effectively tackle insects and other pests, so they cant damage the crop. The agrochemical market is experiencing a renewed interest in insect-control traits as they are researching on new compounds, screening and testing these for active ingredients, and developing them in conjunction with other substances, to make them more viable. For instance, in September 2016, DuPont Pioneer researchers discovered a protein from a non-bacillus thuringiensis bacterium source, which demonstrated an alternative method for controlling corn rootworm in North America and Europe. This can effectively save millions of corn crops that cause significant economic loss to the farmers.
Adoption of precision farming
As farmers face difficulty growing certain types of crops in a given condition with limited resources, it becomes important that scarce natural resources are effectively used to produce more using less. The rapid development of technology in agriculture has resulted in the adoption of various new agricultural practices such as precision farming, stereoscopic agriculture, and ecological agriculture. Among these methods, precision farming is expected to gain prominence as it helps farmers in cultivating crops in all types of soil environments. The advent of GPS and GNSS enables farmers to locate their precise position in a field to create maps to measure variables such as crop yield, terrain, topography, organic matter content, nitrogen levels, and moisture levels.
Although agrochemicals play a vital role in increasing the crop yield, it presents its set of side-effects and can sometimes be harmful to the humans or the environment. As a result, government bodies place regulations in the manufacturing and use of such agrochemical. Currently, however, the market has seen an increase in regulations that can significantly hamper the introduction of new products as well as increase the costs of developing an agrochemical. For instance, in 2016, EFSA announced neonicotinoid assessments to be reviewed at the beginning of 2017. France in June 2016 announced that neonicotinoid insecticides would be banned from 2018. This is because the chemical is highly toxic to the bee population as it impacts their ability to forage, learn and remember navigation routes to and from food sources.
Read more about the trends in the agrochemicals market along with supply market insights, procurement best practices, category management, and pricing insights in SpendEdge’s upcoming report on the global agrochemicals market.