Matthew Phillips, Phillips McDougall
Vineyard Business Centre, Saughland, Pathhead, Midlothian, United Kingdom

Abstract

In the last two years the agrochemical industry has suffered a downturn in value terms, principally as a result of low crop prices and weaker farm economics affecting the crop protection sector. The non-crop agrochemical market, which is more driven by the general economy, has been more resilient. This article investigates the trends in market development by product sector, geographical region and key country. 

A key driver in the industry is innovation. Data is presented to show the rise in the cost of bringing a new active ingredient to the market, which along with increasing regulatory demands has resulted in slowdown in the number of new products being introduced and also entering development. A consequence of this is a greater market share for off-patent chemistry. An analysis of the breakdown and trends in the generic agrochemical market is presented.

The article concludes with a forecast for future market growth, which is expected to be in line with the steady performance between 2006 and 2010, not the rapid expansion seen between 2011 and 2013 when crop prices were at record levels.

The agrochemical industry comprises a number of market sectors:

1. Crop Protection – which includes seed treatments and both chemical and biological active ingredients for weed, pest and disease control in crop situations.
2. Non-Crop Agrochemicals – the same active ingredients but used in non-crop situations (home & garden, turf and ornamentals, public health, termite control etc.)

A significant factor since the mid 1990’s has been the impact of seeds genetically manipulated to express herbicide tolerance or insect resistance, in other words, crop protection through genetic manipulation. Whilst the adoption of these seeds has affected the market for crop protection products, it has also had a significant impact on the market for conventional seeds.
The crop protection market enjoyed a period of sustained growth until 2014, corresponding with a period of rising crop prices and farmer wealth. Following excellent harvests, crop prices in 2015 and 2016 have been significantly lower, resulting in a weaker farm economy and reduced agrochemical purchasing, adverse weather affecting pest, weed and disease pressure is also a major f ...