The global Crop Protection Chemicals Market is witnessing a surge in demand driven by the pressing need for food security and the challenges posed by the worlds growing population, which is projected to reach 9.8 billion by 2050. As cultivable land continues to decline, the need to reconcile these issues becomes increasingly complex, emphasizing the demand for better crop yields.
According to a recent study, developing economies are expected to see a drop of over 60% in arable land per person. Crop protection chemicals have emerged as the most economical means to enhance crop quality and yield. The industry has been evolving rapidly, with innovations in products, efficacy, and regulatory regimes. Today, the crop protection chemicals industry offers more than 800 active ingredients, a significant increase from the mere 100 available in the late 1970s. Among these, herbicides, fungicides, and insecticides are the most widely used across the globe.
In 2018, the crop protection chemicals market was valued at US$64.3 billion, and it is projected to reach US$83.5 billion by 2025, indicating a healthy growth rate of 5.3% between 2021 and 2025. Herbicides have historically dominated this market, accounting for over 50% of the market share in 2018. Herbicides are instrumental in regulating weed growth, which can otherwise reduce crop acreage and yield. Modern herbicides are designed to be highly selective, minimizing their impact on plant growth.
Fungicides rank second in terms of consumption globally. Fungal infections pose a significant threat to crops, with research indicating the destruction of at least 100 million tons of rice, wheat, corn, and soybeans annually. Without the use of fungicides, the yield of a majority of fruits, vegetables, and cereals could decrease by 60%-70%.
Grains and cereals, with a focus on wheat, rice, and corn, constituted the largest segment in the consumption of crop protection chemicals in 2018, accounting for more than 30% of the global market.
Latin America Emerges as a Leading Market for Crop Protection Chemicals
In 2018, Latin America and Asia Pacific were the largest markets for crop protection chemicals. Latin America is expected to be the fastest-growing market, with a projected Compound Annual Growth Rate (CAGR) of 6.3% from 2021 to 2025. The region faces significant challenges in the form of worm, weed, and fungi infestations, which hamper crop quality and yield. Advancements in farming techniques and evolving technologies have driven the growth of crop protection chemicals in Latin America. Brazil and Argentina continue to exhibit healthy growth rates, with Brazil being one of the largest importers of crop protection chemicals.
Asia Pacific, with its rapid population growth, relies heavily on other regions to meet its food demand. China, for instance, has been actively restructuring its crop protection chemicals market since 2015, adopting a zero-growth action plan to regulate pesticide consumption by 2020. However, climate change, characterized by erratic weather patterns, has significantly impacted the demand for crop protection chemicals in Europe and North America. Stringent regulatory regimes and the phase-out of key products and active ingredients are expected to impede market growth.
Integrated Pest Management (IPM) and Sustainable Farming: Key to the Future
The global crop protection chemicals market is set to play a pivotal role in sustainable farming. The adoption of technology has gained momentum in various agricultural applications, including spraying and harvesting. Digital platforms are providing enhanced agronomic guidance on managing fungi and weeds. The growth of the Internet of Things (IoT) within agriculture is poised to revolutionize farming practices and output. IoT enables on-field pest management, allowing farm owners to monitor pest growth and implement necessary countermeasures based on inputs and analytics.
Integrated Pest Management (IPM) has become an effective approach in sustainable farming, combining various pest control techniques–chemical, physical, biological, and cultural–to manage weeds, fungi, and insects. Governments worldwide are increasingly incorporating IPM into their policies to boost crop yields while minimizing environmental impact.
Challenges in Product Development and Market Consolidation
Companies operating in the crop protection chemicals market face challenges in product development, with R&D expenses accounting for 7%-10% of their revenues. Developing a new active ingredient now requires an investment of over US$250 million, primarily attributed to registration and safety testing. Prolonged product development cycles have become a significant hurdle, with the average development time for a new crop protection chemical extending beyond 10 years.
Tightening environmental regulations, especially in the EU, have added to the complexity of commercializing new active ingredients. Popular products like glyphosates are facing potential bans due to their environmental and health impacts, threatening manufacturers with a potential loss of 35%-40% of their total sales.
Market consolidation has been a consistent trend, with megamergers and business restructuring reshaping the landscape. The top six players, including Syngenta, Bayer Crop Science, BASF SE, Corteva (DowDuPont), FMC, and ADAMA, held more than half of the total crop protection chemicals market in 2018. Licensing, acquisitions, and collaborations have become integral strategies for gaining a competitive edge in the market, as managing the cost and time required for new ingredient development remains a key challenge. Japanese companies, in particular, are leading the way in developing crop protection chemicals, accounting for over 25% of products developed globally.
Browse Global Crop Protection Chemicals Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2021-2025-[2023 UPDATE Available – Forecast 2023-2030*] (By Product Coverage (Herbicides, Insecticides, Fungicides, Misc.(Rodenticides, etc.)), Crop Coverage (Grains & Cereals, Pulses, and Oilseeds, Fruits and Vegetables, Misc.(Plantation Crops, etc.)), By Geography, By Company): https://www.fairfieldmarketresearch.com/report/global-crop-protection-chemicals-market
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