AGROCHEMICALS
20 % for herbicides and 30 % for insecticides . In active volume terms , however , the proportion ‘ at risk ’ is much higher as the EU regulates out typically older and toxic high-volume products in favour of those with lower application rates .
Conflicting pressures
Overall , Mabon forecast a CAGR of 2.3 % for crop protection chemicals in the years 2020-2025 as these drivers continue in the coming years . He highlighted both positive and negative future drivers at present and going forward . On the positive side , the development of pest resistance is driving the need for new technologies and modes of action ( MoA ), while ‘ technification ’ in developing markets is pushing growers towards highercost products . The basic treated acreage is growing in South East Asia , India , Latin America and Eastern Europe , while biofuels and increased meat consumption in Asia will indirectly fuel input demand . Conversely , new plant input trait acres , notably in China with glyphosate-tolerant and insectresistant corn , are lowering herbicide costs and removing the need for sprays . Variable rates and targeted application are reducing volumes , as will organic production . Regulation continues to remove products from market and this will only be accelerated by further actions in developed countries targeting volume
Figure 2 – Expected impact of precision agriculture on chemical pest control Source : AgbioInvestor reduction , such as the EU Farm to Fork ( F2F ) strategy .
Other growth drivers
Looking further forward , Mabon noted that biopesticides of all kinds are a small but rapidly growing part of the industry . They had a 9.2 % CAGR from 2014 to 2019 and are forecast to grow at 7.5 % CAGR to 2024 . A much more significant switch to biologicals is expected in the second half of the decade as F2F and organic production really kick in . Digital and precision agriculture have already impacted supply chains and grower decision-making . When it comes chemical control of different pests ( Figure 2 ), the main impacts of variable rate technologies are expected to be on weeds , which are easier to target than insects or diseases , as will mechanical control technologies like RootWave . Overall , herbicides will be most impacted , but field sensors and pest prediction technologies will also have their impacts of the efficiency of insect and disease control . ( All 23 members of the industry association CropLife Europe are active in some way on biopesticides and are gearing up towards digital and precision agriculture , confirmed Laurent Oger , director of regulatory affairs . The frustration for him is that these are the only areas in which the European Commission wants to talk about when it comes to innovation , which bodes ill for introducing new
Technology Weeds Insects Diseases Variable rate +++ + + Field sensors ++ +++ +
Mechanical +++ - - Pest prediction + ++ +++
Key - No significant impact + Minor impact ++ Moderate impact +++ Major impact chemistries first , or sometimes ever , in Europe .)
Need for new technology
Meanwhile , Mabon said , resistance development and regulatory pressure are increasing the need for R & D into new technology . There is increased interest in low toxicity and environmentally sound actives , particularly new MoA technologies such as Mitsui ’ s Cyclopyrimorate , which is the first new MoA herbicide in many decades , and Corteva ’ s Fenpicoxamid , a naturally derived fungicide with a novel MoA . Many new AI discovery companies are springing up , offering entirely new technologies that can develop actives faster at lower cost , such as computational , in silico and AI-based discovery ; DNA-encoded libraries ; and metabologenomics . These may compete or collaborate with existing discovery companies such as the majors and the Japanese industry . Changing dietary habits will impact demand for particular crops and thus for crop protection chemicals . Veganism in the developed world will pull in one direction , but rising meat consumption everywhere but Europe will outweigh it , Mabon suggested . And then there is the great uncertainty of climate change ...
Suppliers mirror customers
Agrochemical industry consolidation , Helwig noted , would not have been possible without its suppliers ’ parallel move to becoming manufacturing partners . This enabled their customers to move from manufacturing to serviceorientation , and to reduce their net working capital and reduce the weather-related volatility inherent in the sector . They also moved sourcing of starting materials and generics to lower cost suppliers in China and India , some of whom in time also evolved to become manufacturing partners . As a result , the industry of today is almost the reverse of what it was 40 years ago . Application rates are much
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