Recent trends & opportunities in the global agrochemical market
AgbioInvestor partner Garry Mabon and chemical industry consultant Glenn Carroll discuss recent trends and opportunities in the agrochemical market
The agrochemical market reached an estimated $ 73.4 billion at the ex-manufacturer level ( i . e . brand owner to first stage of distribution ) in 2021 , an increase of 8.0 % over 2020 in nominal terms . This was significantly ahead of the average over recent years , with the market having increased in the low single-digit range annually since the significant decline experienced in 2015 and the stagnant market in 2016 . The average CAGR of the crop protection industry was 1.3 %/ year between 2015 and 2020 , so 2021 represented an anomalous year in terms of growth . Despite this , there remains significant growth potential in particular segments . In recent years , the industry has come under increasing scrutiny , due to the perceived unacceptable environmental and social impacts of certain chemistries . Despite this , while pests exist in crops , as they always will do in some form , there will remain a market for control of these pests to protect yields and the key drivers for conventional agrochemical usage will remain in place . Notable growth drivers include improved agricultural economics in developing agricultural economies , such as in South and Southeast Asia , where usage intensity is relatively low compared to more mature developed markets and there is a requirement for higher yields to feed an increasing global population . of 2.3 %/ year between 2020 and 2025 , with some of the key growth drivers outlined as follows :
• Resistance development : Pests have developed resistance to existing pesticidal modes of action ( MoA ), representing an opportunity for new or novel MoA or resistance-breaking technologies . For example , BASF ’ s cinmethylin was developed by Shell and originally introduced in 1989 , for rice ; however , it has since been discovered to have a novel MoA , with potential for grass weed control in the high-value EU cereals market
• Regulation : A strict regulatory environment has already led to the loss from the market of many active ingredients ( AIs ) in the EU , leaving an opportunity for any new introduction that can replace lost uses . Further to this , the loss of low-cost resistance management AIs such as mancozeb , chlorpyrifos and chlorothalonil in several markets , notably the EU , has created opportunities for new MoA chemistries , typified by Corteva ’ s fenpicoxamid , a new MoA fungicide with good potential in Septoria resistance management in cereals
• Sustainability legislation : Legislation in markets such as the EU , China and Japan has called for a significant reduction in pesticide volumes , notably a 50 % reduction in the chemical pesticide risk-volume index in the EU by 2030 . This provides an opportunity to replace older , high application rate products with newer low-rate alternatives . For instance , the rice grass weed herbicide butachlor was introduced in 1969 and is used at a rate of ~ 1 kgai / ha , whilst Corteva ’ s grass weed herbicide penoxsulam , first introduced in 2005 , is typically used at only 0.03 kgai / ha Due to these factors , growth opportunities can widely be found for different agrochemical AIs , especially newer , lower application rate , higher prices AIs . Figure 1 shows the value of crop protection AIs by decade of introduction in 2015 and 2020 , and a forecast to 2025 . This demonstrates that AIs introduced in more recent decades have grown more strongly
Figure 1 - Crop protection market by AI decade of introduction
Key drivers
The crop protection industry is forecast to increase at an average rate
40 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981