Global Agrochemicals Market Size & Growth Trends Analysis Report

With the continuous rise in the global population, demands for food supplies have been on the rise. To be able to supply this surplus demand, agricultural productivity has to increase. Agrochemicals are vital aids in enhancing crop yields to make food security a reality. These are in the form of fertilizers that boost soil fertility and crop growth, pesticides that offer protection from pests and diseases to crops, and herbicides that prevent the growth of weeds that normally compete for resources with the crops. The demand in the agrochemicals market is driven by GMOs, biotechnology, and precision agriculture. These genetically engineered organisms have features that make them more resistant to pests, diseases, and environmental stressors. The effective use of these calls for the application of agrochemicals that the structures work alongside to promote their efficiency. This area mainly utilizes biological procedures in making enhancements in agriculture. The recent biotechnology-based agrochemicals developed entail biopesticides and biofertilizers providing sustainable and environmentally friendlier options to the conventional ones. This is a technology that applies agrochemicals greatly and precisely compared to existing products, only through effective and efficient use of data and analytics. It also helps minimize waste of inputs and maximizes on accuracy, resulting in better crop yield with little to no environmental damage.

Another driving factor is rising awareness of the benefits that can be procured by the crops after using agrochemicals. Farmers and other stakeholders in the agricultural sector are being more informed of the nutritive and regulatory advancements made through the use of agrochemicals toward improved crop yields and quality products, taking into consideration an increase in resistance against a variety of agricultural constraints. As farmers notice gains on those advantages of using these products, demand for agrochemicals continues growing.

Several government regulations are supporting the global agrochemicals market. Many world governments regulate and support the agrochemical industry for safe and effective products. These regulations come in the form of setting safety standards, processes of approval, and use. Most commonly, the emphasis is on the responsible application of agrochemicals. Added to these are subsidies and support programs aimed at inducing the use of agrochemical solutions by the farmer. As the land for agriculture is quite less as compared to the population, it becomes necessary to use agrochemicals to maximize crop yields from a piece of land, further eliminating the idea of deforestation. Due to high global warming, the climate has become unpredictable globally. This helps in more demand for agrochemicals as it helps in agriculture practices. Global warming and climate changes have brought unpredictability into weather patterns, thus disturbing agricultural practices. Agrochemicals in themselves ease the burden on drought conditions, soil fertility, and pest control relieved by up-to-the-moment climate changes.

The agrochemicals are normally backed by tax credits or grants from the government for research & development. With such financial assistance, companies produce efficient and effective products including innovations. As trade agreements have created an environment for agrochemicals to move across borders, farmers’ access to these facilities has improved in different regions of the world. The farmers receive access to these facilities as various parts of the world can now trade or import agrochemical products freely owing to the trade agreements. To enhance pest control with less reliance on chemicals alone, governments are promoting integrated pest management strategies that combine agrochemicals with other methods of controlling pests. Sufficient legislation contributes to the development and use of agrochemicals that should be safely applied to human beings and the environment; this ensures effective planning and strategy by the companies when working within a set framework of safety and sustainability.

Market Opportunities

Emerging regional markets and IPM (Integrated Pest Management) strategies are the two main opportunities for the global agrochemicals market. Many countries in the Asia Pacific region are creating huge agricultural growth for themselves, driven by rising food demand, and government support for modern farming. Crop production and modernity in agriculture practices have risen strongly, generating demand for agrochemicals in the past few years. Countries such as Brazil, and Argentina have large-scale agricultural industries with rapidly growing crop production and export activities. The crop production and exports drive demand for better agrochemical solutions for higher productivity and effective pest management. Several African countries are putting many efforts into agricultural development to improve food security and support economic growth. The move towards modern farming practices and higher crop yields in Africa creates a huge opportunity for agrochemical firms.

The IPM strategies combine several methods of control, covering all three main approaches i.e. biological, cultural, and chemical. The holistic approach adopts the least environmentally harming control methods, which reduces the chemical burden of farms. Governments and agricultural organizations are increasingly advocating for IPM because these programs offer significant sustainability and environmental advantages. Such support could also consist of financing, incentives, as well as regulatory assistance for products compliant with IPM hence providing more opportunities for agrochemical manufacturers.

Technological Advancements

Agrochemicals have received numerous technological advancements in the past few years. The use of drones, GPS, and remote sensing technology in precision farming enables the application of agrochemicals appropriately based on a measurement system. The precision agriculture technology, thus reduces wastage margins while minimizing negative impacts on soil and its nature. Biotechnology has developed genetically modified (GM) crops that would fight pests, herbicides, and diseases. It is facilitating the development of agrochemicals that have minimum environmental damage.

Market Restraints

The major restraints for the global agrochemical market are government regulations and environmental concerns. The government regulations call for imposing approval processes for agrochemicals that entail rigorous testing for safety, and effectiveness, which eventually raises the cost of development. There are different standards at the international level and labeling requirements which are complex and expensive and are to be complied by companies. Environmental concerns surrounding runoffs of dangerous chemicals into water result in a pollution of water and consequently have the potential to effectively destroy the ecosystems, as well as long-term degradation related to the use of chemicals in soils. Among other threats to these products are those from potential health impacts resulting from the use of agrochemicals and the development of resistant types of pesticides and weeds. Accordingly, while companies address the environmental aspects, they are under stringent regulatory conditions and, therefore, compulsorily innovate safer and more sustainable solutions in agrochemicals.

Impact of COVID-19

The COVID-19 pandemic made consumers more aware of healthy food and, therefore, developed an interest in a shift towards sustainable agriculture. The increasing interest in bio-based agrochemicals and IPM strategies drove this change as such farming methods place an emphasis on farming friendly to the environment and sustaining it. The rate of adoption of precision agriculture techniques has also risen during the pandemic. These are advanced techniques whereby agrochemicals are only applied where necessary; therefore, very little goes to waste and less of it is left over in the environment. It is not only a process that supports sustainable development but also optimizes resource use in farming. The pandemic also increased the pace of tech adoption that improves precision and efficiency in the application of agrochemicals.

However, the agrochemicals market also had the problem of supply chain disruption. Owing to the lockdown, there were logistic problems and an increase in the cost of raw materials; the shortage of materials troubles the manufacturers of agrochemical products. Since there was an economic impact on the growth of the agrochemical industry due to the lockdown, governments of different countries started providing incentives and subsidies for the manufacturers.

Segmentation

The global agrochemicals market is segmented into product type, application, and crop type. Based on product type, it is further segmented into pesticides, fertilizers, adjuvants, and plant growth regulators. The fertilizers segment has acquired the largest market share in 2023. Fertilizers have the largest share of the agrochemicals market owing to their requirement by crops to grow, their efficiency in increasing agricultural productivity, and their applicability in a wide range of crops and regions. Their dominance is further boosted by the technological developments, economic aspects, and the growing demand for food globally.

By application, the market is further bifurcated into crop protection, soil treatment, foliar application, and seed treatment. The crop protection segment has acquired the largest market share in terms of application in 2023. It finds the largest market share in terms of application due to the effectiveness of post-emergence crop protection agrochemicals in managing pests and weeds affecting established crops, flexibility in application, and role in improving crop yields. The dominance of these methods is further supported by technological advancement and economic benefits, hence is a first choice for farmers in need of effective and targeted crop protection solutions.

Based on crop type, the market is further segmented into cereals & grains, fruits & vegetables, oilseeds & pulses, and others. The cereals & grains segment held the largest market share based on crop type in 2023. One of the major driving factors increasing the agrochemicals market share occupied by cereals and grains is their central role in world food security, given the large areas cultivated with cereals and grains and their important economic value. Improving agrochemical technology, together with precision agriculture and high yield potential, associated with global trade dynamics, support the leading position of cereals and grains in the agrochemicals market.

Regional Analysis

The Asia Pacific region has the largest market share of agrochemicals as it comprises countries such China, India, Japan, and Australia which are one of the top agricultural producing countries. The population density is one of the major drivers for this as there is an ever-increasing need for food. The large areas of arable land in this region make it possible to grow many different types of crops. The vast tracts of land on which they are normally grown require high doses of pesticides to improve yields and protect them against pests or diseases. The rising economies and progressions made by nations within the broad Asia Pacific region also increase demands for advanced agrochemical technologies that can be used to boost productivity in agriculture.

Other major agrochemical-consuming markets include the U.S., Canada, and Mexico, which together make North America the second largest market for agrochemicals. North America represents a big agro-based market for advanced agricultural practices, including precision farming, which is driving the demand for sophisticated agrochemicals. This is aiding the adoption of new technology and high-in-put agriculture, which leads to increased demands on productivity and efficiency through co-application of sophisticated agrochemical products. This has the effect of commercializing units running into the thousands of acres from up-country down to the final farm gate, therefore generating huge markets for agrochemicals associated with the optimization of crop yield and the preservation of soil health across the continent.

The major driving countries for the European agrochemicals market are Germany, France, UK, Spain, and Italy. The growing demand for bio-based and organic agrochemicals is a major opportunity in Europe as more consumers are disposed toward green and sustainable methods of farming. The regional regulatory framework favors the use of reduced harmful chemicals, which has been and will continue to drive the development and use of eco-friendly agrochemical solutions. The European market has moderate growth in the agrochemicals market.

Brazil and Argentina are major contributors to the agrochemicals market across Latin America. Geographically, these countries have large-scale agricultural production in crops like soybeans and corn. In turn, this demands agrochemicals to raise yield and maintain crop health. Despite strong agricultural production, the region of Latin America is hugely exposed to variables including economic fluctuations and regulatory differences, which become significant factors affecting market growth. Latin America has low to moderate growth in the agrochemicals market.

The African region produces a low market share for agrochemicals, as it is merely a geographical jungle comprising arid and semi-arid areas that hinder agriculture. Agricultural practices in this region are changing with investments in modern farming techniques and an increasing use of agrochemicals. With these practices changing, the market is likely to experience some growth. Improving agricultural practices and more investment in sustainable farming will create the opportunity for agrochemical demand to surge.

Competitive Analysis

The key players of the global agrochemicals market are BASF SE, Nufarm Limited, The Dow Chemical, UPL Limited, ADAMA Agricultural Solutions Ltd., FMC Corporation, Syngenta AG, Corteva Agriscience, Bayer AG, and American Vanguard Corporation, among others.

In June 2024, FMC India launched two products - VELZO and COSUIT fungicides which are designed to protect the fruits and vegetables crops from damaging fungi diseases since the very beginning of the crop cycle.

In May 2024, Coromandel International partnered with Japan’s ASK to launch Prachand which is a patented product using Japanese technology to protect crops from pests.

In May 2024, BASF launched the insecticide Efficon. This insecticide will help farmers suck pests. The product will be quick to work as the company claims that the product will start working in two hours after application.

In April 2024, To facilitate the commercialization of innovative fertilizer solutions in China, Plant Health Care (AIM.PHC.L), a major supplier of peptides used by growers to boost crop output and quality within global agricultural markets, has partnered with AMVAC, an American Vanguard Company, on a distribution agreement.

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The global agrochemicals market is segmented as follows:

By Product Type (Revenue: USD Billion, 2019 – 2031)
●    Pesticides
●    Fertilizers
●    Adjuvants
●    Plant Growth Regulators

By Application (Revenue: USD Billion, 2019 – 2031)
●    Crop Protection
●    Soil Treatment
●    Foliar Application
●    Seed Treatment

By Crop Type (Revenue: USD Billion, 2019 – 2031)
●    Cereals & Grains
●    Fruits & Vegetables
●    Oilseeds & Pulses
●    Others

By Region (Revenue: USD Billion, 2019 – 2031)

● North America
o U.S.
o Canada
o Mexico

● Europe
o U.K.
o France
o Germany
o Italy
o Spain
o Rest of Europe

● Asia Pacific
o China
o Japan
o India
o South Korea
o South East Asia
o Rest of Asia Pacific

● Latin America
o Brazil
o Argentina
o Rest of Latin America

● Middle East & Africa
o GCC Countries
o South Africa
o Rest of Middle East & Africa