Agrochemicals Market is Primed for Growth Owing to Increasing Food Demand

 

The agrochemicals market is primarily engaged in manufacturing fertilizers and crop protection chemicals that are used widely in agricultural practices. Fertilizers help to enrich soil fertility and enhance crop yields while crop protection chemicals such as herbicides, insecticides and fungicides are used to protect crops from pests and diseases. The global agrochemicals industry has witnessed strong growth over the past few years owing to rising population and growing demand for food grains worldwide.

Population growth has pushed global food demand considerably. With per capita agricultural land shrinking and arable land area remaining constant, increasing crop yields through the use of agrochemicals has become paramount. Fertilizers and crop protection chemicals play a vital role in maximizing agricultural output to meet rising food demand. Their application helps boost average yields per hectare and safeguards crops against catastrophic crop losses due to pests and diseases. Growing awareness about scientific farming techniques and comprehensive farm management practices have also propelled agrochemical consumption in both developed and developing regions.

The Global agrochemicals Market is estimated to be valued at US$ 81.27 Bn in 2024 and is expected to exhibit a CAGR of 6.2% over the forecast period 2023 to 2030.

Key Takeaways

Key players operating in the agrochemicals market are ADAMA Ltd., Arysta Life Science, Bayer AG, Isagro Spa, Nufarm, Nutrien Ltd, OCI Nitrogen, Sociedad Quimica Y Minera De Chile, and The Mosaic Company among others. These key players are focusing on new product launches, partnerships and mergers & acquisitions to strengthen their global presence.

Growing demand for food worldwide presents considerable opportunities for agrochemical manufacturers to expand production and sales volumes. Investment in R&D for developing novel bio-based and eco-friendly products also provides lucrative growth avenues. Furthermore, growth prospects remain high in developing countries of Asia Pacific and Latin America where there exists sizeable scope to raise crop yields and farm incomes.

Market Drivers:

- Increasing global population - The world's population is expected to reach around 9.7 billion by 2050 placing tremendous pressure on the agricultural sector to increase food production. Growing population boosts demand for agrochemicals.

- Shrinking arable land - With expansion of urban areas, arable land per capita has reduced significantly over the past few decades. Maximizing yields from available cultivated land through agrochemicals is crucial.

Market Restrains:

- Stringent regulations - Agrochemicals may have adverse effects on the environment and human health if not used responsibly. Stricter norms around the use of certain chemicals acts as a restraint.

- Reliance on monsoon - As majority of crops are rain-fed in several developing countries, fluctuations in monsoon rains impact agrochemical demand in such regions.

Segment Analysis

Fertilizers is the dominating sub segment under the agrochemicals market. Fertilizers account for over 50% of the total agrochemicals market share globally. Factors such as increasing concerns regarding declining soil fertility levels and the need to enhance agricultural productivity are driving the demand for fertilizers. Nitrogenous fertilizers form the largest category and accounted for over 30% of the total fertilizers market in 2024. The high nitrogen content makes nitrogen fertilizers highly effective in boosting the growth and yield of several crops.

Pesticides form the second largest sub segment in the agrochemicals market. Herbicides dominate pesticide sales and accounted for over 25% of the total pesticides market share in 2024. High crop damage caused by weeds and the need for effective weed management are the key factors propelling the demand for herbicides. Geographically, Asia Pacific leads both the fertilizers and pesticides markets owing to the large agricultural output and growing demand for food in countries such as India and China.

Global Analysis
Asia Pacific is currently the dominating as well as the fastest growing regional market for agrochemicals globally. In 2024, Asia Pacific accounted for over 55% of the global agrochemicals market share. Countries such as India, China, and Indonesia are the key drivers as they are among the largest agricultural producers in the world. Factors such as the rapidly expanding farmland, use of hybrid seeds and focus on higher yields are augmenting the need for agrochemicals in Asia Pacific. Europe and North America are other major markets and collectively hold over 30% share. However, their market is relatively mature owing to policies promoting sustainable agricultural practices.