Global Agrochemicals Market, By Product Type (Fertilizers, Pesticides, and Plant Growth Regulators), By Application (Cereal & Grains, Oilseeds & Pulses, Fruits & Vegetables, and Other Applications), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

In 2022, the global agrochemicals market was worth US$ 238.4 billion and will reach US$ 321.1 billion by 2032. It is anticipated to witness growth at a CAGR of 3.1% between 2023-2032.

Agrochemicals are chemicals that are used in agriculture to increase crop yields, safeguard crops against weeds, diseases, and pests, and, most importantly, improve the fertility of the soil. Due to their increased crop yields and commitment to food security, they are essential to modern agriculture. In order to prevent pests from harming crops, agrochemicals are also essential. Pests, including aphids, beetles, caterpillars, and mites, are helped by them to prevent damage to crops.

Crops require vital nutrients, which agrochemicals, especially fertilizer supply. They raise the natural nutritional content of the soil, ensuring that crops have access to enough nutrients to develop healthily and produce significant harvests. The agrochemicals market fulfils this demand. The fertility and structure of soil can be enhanced by agrochemicals. The soil’s ability to retain water, make nutrients available, and support microbial activity are all improved by soil conditioners such as organic amendments and soil additives. They enhance nutrient uptake, foster healthy soil ecosystems, and help to create an environment that is conducive for plant roots.

The rising population has led to changes in food consumption patterns, and subsequent rise in food demand. This has led to tremendous increase in demand for agrochemicals.  Moreover, growing animal husbandry and animal feed sectors are fuelling the growth of the market over the forecasted time period. Also, technological advancements in agriculture, along with the launch of advanced agrochemicals, will fuel agrochemicals market growth.

Driving Factors

Rising Global Population Leading to High Demand For Agrochemicals Market

The population of the planet is growing exponentially. In the next 3 decades, the global population is projected to grow by about 2 billion people, from the present 8 billion to 9.7 billion in 2050, with a potential peak of nearly 10.4 billion in the middle of the 2080s, according to World Population Prospects 2022.

The anticipated population of the entire planet is 8.5 billion people in 2030, 9.7 billion in 2050, and 10.4 billion in 2100. The two most populated nations in the world continue to be China (1.4 billion) and India (1.4 billion), both of which have populations of over 1 billion, or over 18% of the entire world’s population. India is anticipated to surpass China as the world’s most populated nation around 2023.

The tremendous rise in population is directly related to changes in food consumption patterns. Increasing population is directly proportional to the rise in food demand. Therefore, increasing food demand is expected to fuel the demand for agrochemicals market during the projection period, as they are an essential component of agriculture and food security.

Decreasing Arable Land

According to a number of sources, the amount of land used for agriculture worldwide has decreased recently. Only 12% of the world’s land surface is used for crop production, and there is little room for further agricultural land expansion, according to the FAO’s resource forecast to 2050.

As a result, there is pressure to use soil treatment chemicals to upsurge food production on the current arable land. In 2011, the FAO reported a loss of 54 million acres of arable land in affluent nations such as North America, Europe, and several South Asian nations. Their arable land is predicted to continue to slowly drop, reaching 608 and 586 million ha in 2030 and 2050, respectively, according to this study’s forecasts.

The US Department of Agriculture reports that since 2000, the overall amount of land used for farming in the US has dropped yearly. As of 2021, there were 895.3 million acres of cropland worldwide, a drop of about 50 million acres. Thus, a decrease in cultivable or arable land is expected to promote the demand for agrochemicals, as they play a crucial role in enhancing soil fertility and increase crop production. This is a key factor driving the agrochemicals market growth during the projection period.

Restraining Factors

Toxic Effects Associated with Agrochemicals

Many agrochemicals are extremely harmful to both people and animals when they are concentrated. For instance, while anhydrous ammonia, a gaseous fertilizer, is generally safe for people in low concentrations, it can be lethal in high amounts and float across great distances. Federal and state agencies frequently control the use and storage of these fertilizers, necessitating the need for specialized tools and training.

Children who consume produce raised with these chemicals have also had trace quantities of several agrochemicals discovered in their urine samples. These levels were reduced by changing the diets of these kids to products farmed without agrochemicals. Thus, toxic effects associated with agrochemicals may limit the agrochemicals market growth during the projected time period.

Environmental Concerns

In many regions of the world, excessive nitrogen and phosphorus present in fertilizers and pesticides promote the establishment of hazardous algae blooms, which in turn cause the development of dead zones (hypoxic areas), which contribute to the eutrophication of freshwater systems and coastal areas. Other forms of soil, groundwater, and air pollution are also brought on by an excess of nutrients.

During their production, transportation, and usage, fertilizers emit greenhouse gases (GHGs) into the atmosphere. Nearly 40% of agricultural GHG emissions are caused by the use of inorganic fertilizers and the storage and use of manure. Thus undesirable environmental effects are expected to have a negative impact on the adoption of agrochemicals.

COVID-19 Impact Analysis

The pandemic caused significant disruptions in global supply chains, including those related to the agrochemicals market. Restrictions on transportation, lockdown measures, and reduced workforce availability have hampered the production, distribution, and availability of agrochemical inputs such as fertilizers, pesticides, and herbicides. The lockdown measures and economic downturn caused by the pandemic led to reduced agricultural activities and decreased demand for agrochemicals. Farmers faced financial constraints and uncertainty, resulting in lower investments in agrochemical inputs. This decline in demand affected the revenue and profitability of agrochemical companies.

However, the pandemic accelerated the adoption of digital technologies in the agrochemical industry. Remote working, online sales, and digital platforms for farmer engagement and support became more prevalent. Agrochemical companies increasingly utilize digital tools for marketing, distribution, and customer support, streamlining operations and reducing reliance on traditional channels. It is likely to stimulate the demand for agrochemicals market in the post-pandemic period.

By Product Type Analysis

Fertilizers are Witnessing Highest Growth

The fertilizers segment dominated the agrochemicals market in 2022 with the largest revenue share of 60%. There is a growing emphasis on improving agricultural productivity to meet the rising demand for food, feed, and fiber. Fertilizers provide essential nutrients, such as nitrogen, phosphorus, and potassium, which are crucial for plant growth and optimal yields.

Also, key advancements in agricultural technology have led to the development of more efficient and targeted fertilizers. Precision agriculture techniques, such as soil testing and nutrient management, help farmers optimize fertilizer use, leading to increased demand for these products. Thus, growing emphasis on improving agricultural productivity and the development of efficient and targeted fertilizers are key factors driving the growth of the agrochemicals market during the projection period.

On the other hand, the pesticides segment is expected to witness high growth during the estimated time period. Pesticides are essential for managing pests, including insects, weeds, fungi, and diseases that can damage crops, reduce yields, and impact food quality. As agricultural production intensifies, the risk of pest infestations increases, leading to a greater demand for effective pest control measures. Thus, the increased risk of pest infestation due to high agricultural production is a major factor stimulating the demand for pesticides during the estimated time period.

By Application Analysis

Cereal & Grains is the Leading Segment

Cereal & grains are expected to dominate the agrochemicals market with a revenue share of 43% throughout the forecast period. Cereal and grain crops are susceptible to a wide range of pests, including insects, weeds, and diseases. Agrochemicals, such as insecticides, herbicides, and fungicides, are crucial for controlling these pests and diseases, protecting crop yields, and ensuring quality grain production. The growing global population and changing dietary preferences, including the increased consumption of cereals and grains, have led to higher demand for these crops.

Agrochemicals are used to maximize yields and ensure a consistent supply of high-quality grains to meet this demand. Moreover, the development of new agrochemical products and formulations, along with advancements in application technologies, has increased the effectiveness and efficiency of agrochemical use in cereal and grain production. These advacements in agrochemicals market have led to rapid growth.

Precision agriculture techniques, such as variable-rate application, help optimize agrochemical use, reducing waste and minimizing environmental impact. Thus, increased consumption of cereals and grains, along with the development of new agrochemicals and technological advancements, are key factors driving the segment growth during the forecast period.

Also, fruits & vegetables are anticipated to witness high growth during the projection period. Fruits and vegetables are often prone to a wide range of pests, including insects, mites, nematodes, and diseases. Agrochemicals, such as insecticides, fungicides, and acaricides, are crucial for controlling these pests and diseases, protecting crop yields, and ensuring the quality of fruits and vegetables.

Consumers are increasingly demanding high-quality fruits and vegetables which are free from pest damage, diseases, and cosmetic blemishes. Agrochemicals are used to maintain the visual appeal and overall quality of produce, meeting consumer expectations and market standards. Therefore, rising demand for high-quality fruits and vegetables is likely to fuel the demand for agrochemicals market during the projection period.

Agrochemicals Market Segments

Product Type

• Fertilizers
  • Nitrogenous Fertilizer
  • Phosphatic Fertilizer
  • Potassic Fertilizer
• Pesticides
  • Insecticides
  • Herbicides
  • Fungicides
  • Other Pesticides
• Plant Growth Regulators

Application

• Cereal & Grains
• Oilseeds & Pulses
• Fruits & Vegetables
• Other Applications

Opportunity

Rise in NUE for increasing fertilizer efficacy and reducing environmental side-effects.

Recent agricultural research and policy agendas have given a lot of emphasis to the possibility of reducing climate change by increasing nitrogen usage efficiency (NUE) in croplands. The use of chemical fertilizers, particularly nitrogen, in crop production is crucial to manage issues related to both food security as well as the environment.

To meet both the present and future food demand, there is a need to improve crop yields by increasing nutrient utilization to a significant extent.  This can be achieved by increasing NUE. Contrarily, because fertilizer use in croplands is a significant source of anthropogenic nitrous oxide (N2O) emissions, it is crucial to reduce greenhouse gas (GHG) emissions through effective fertilizer management in order to address agriculture’s role in climate change. Additionally, using fertilizers excessively or improperly will result in significant financial losses for farmers. These have served as the main opportunites in the agrochemicals market.

Because of this, increasing NUE in croplands offers the chance to address the global challenges of food security, farmer livelihood, and environmental protection. Thus, the use of NUE is key towards enhancing the efficacy of fertilizers and also reducing their possible environmental side effects. It is likely to boost the market growth during the projection period and provide new growth opportunities for the agrochemicals market in the upcoming years.

Trends

Development of environment-friendly agrochemicals and use of precision agriculture techniques

There is an increasing focus on developing agrochemicals that are more environmentally friendly and have minimal impact on non-target organisms. Biopesticides, such as bio fungicides, bioinsecticides, and bioherbicides, derived from natural sources like plants, microorganisms, or insects, are gaining popularity. These products offer effective pest control while minimizing risks to human health and the environment.

Moreover, precision agriculture techniques, including the use of remote sensing, drones, and satellite imagery, are being employed to optimize the application of agrochemicals. By accurately identifying pest and disease hotspots, farmers can target specific areas, reducing the overall use of agrochemicals and minimizing their environmental impact.

Digital technologies also enable real-time monitoring and data-driven decision-making in agrochemical applications. Therefore, the development of environment-friendly agrochemicals and the use of precision agriculture techniques are new emerging trends that are expected to contribute to agrochemicals market growth during the projection period.

Regional Analysis

Asia Pacific leads the market by holding a major revenue share in the account.

The Asia-Pacific region is expected to hold the largest share of 32 % in the agrochemicals market during the projected time period. The growth of the market in the region is driven by the presence of major countries such as India, China, and Japan, which are top producers of agricultural goods.  By 2025, Inc42 projects that the agricultural sector in India will grow to a value of US$24 billion.

The sixth-largest food and grocery sector in the world is in India, where 70% of sales are made through retail. According to 2023 First Advance projections (Kharif alone), the nation’s total production of food grain is predicted to be 149.92 million tonnes. Thus, the high production of agricultural goods is a major factor driving the growth of the market during the projection period. Additionally, the agrochemicals market growth is being fuelled by the increasing use of innovative technologies such as artificial intelligence (AI), blockchain, geographic information systems (GIS), drones, remote sensing technologies, as well as the introduction of numerous e-farming applications.

Moreover, the North America region is expected to witness high growth during the estimated time period. Rising demand for food has led to an increase in demand for high agricultural output. It is a major factor driving the demand for agrochemicals over the projection period. The United Nations Food and Agriculture Organization i.e., FAO, lists corn, soybeans, wheat, cotton, tobacco, rice, sorghum, and barley as the main crops grown in the US.

Corn and soybean production increased in 2021, according to the National Agricultural Statistics Service’s (NASS) 2021 Crop Production Annual Summary. A 7% increase from 2020 saw US maize farmers produce 15.1 billion bushels. In 2021, production of soybeans reached a record high, up 5% from the previous year. At 17.6 million 480-pound bales, total cotton production for 2021 increased by 21% above that of 2020. Therefore, rising agricultural output is likely to stimulate the demand for agrochemicals market over the forecasted time period.

Key Regions and Countries

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Spain
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Rest of Asia-Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• MEA
  • GCC
  • South Africa
  • Israel
  • Rest of MEA

Market Share & Key Players Analysis

The global agrochemicals market is highly competitive and comprises of several market players. The market is growing at a high rate due to rising demand for increasing agricultural output by using agrochemicals. Additionally, technological investments, new strategic agreements, mergers and acquisitions and launch of new products by key market players are likely to have a positive impact on the market growth in the upcoming years.

Top Key Players in Global Agrochemicals Market

• BASF SE
• The DOW Chemical Company
• Bayer CropScience AG
• Adama Agricultural Solutions
• Corteva Agriscience AG
• Huntsman International LLC
• Croda International Plc
• FMC Corporation
• Evonik Industries AG
• Helena Agri-Enterprises, LLC
• Nufarm
• Other Key Players

Recent Developments

• In February 2023, Best Agrolife i.e. BAL, an Indian agrochemical firm, expanded its product line by launching six new formulations: Promos, Amito, Propique, Doddy, Ghotu, and Headshot, in addition to their already existing star brands Citigen and Vistara. BAL also used the launch occasion to raise awareness about the benefits of its product range and to enlighten the audience about how the company is effectively altering India’s agriculture industry.
• In June 2022, UPL Limited, a global provider of innovative crop solutions to farmers & agribusinesses launched new pesticides in India that contains Flupyrimin-a patented active ingredient, and are specifically designed to target toxic rice pests. Flupyrimin offers residual control that is effective against major rice pests such as the yellow stem borer (YSB) and brown plant hopper (BPH).

Report Scope