World demand to approach $57 billion in 2016
Global demand for formulated pesticide products will approach $57 billion in 2016, driven by demand for value-added, proprietary formulations, particularly those that combat increasingly resistant pest populations while addressing growing concerns about pesticide safety. Herbicides are the largest product type by value, while fungicides are expected to show the strongest growth. Insecticide growth will be significantly constrained by the growing popularity of integrated pest management techniques and continued concern about adverse effects.
Multi-mode action, higher loadings to benefit herbicides value demand
Rapid growth in the cultivation of herbicide-tolerant crop varieties over the past decade has helped drive strong growth in herbicide demand since 2001 and contributed to significant increases in agricultural productivity. However, these advances have not come without a cost, as some farmers have overused particular active ingredients, especially glyphosate. This has led to a growing problem with weed resistance in almost every region. This problem is forcing changes in how farmers use herbicides, and growers are increasingly turning to formulations with more than one mode of action, and/or are using increasing amounts of herbicide, to guarantee extensive protection from weeds. Both choices will contribute to rising herbicide value demand going forward, helping to drive advances.
Resistance, health concerns to affect insecticide use
Unlike herbicides, which are used on almost every crop, insecticides are generally used on an as-needed basis, as insect populations are largely influenced by weather conditions. Additionally, insecticide use is influenced by the cultivation of crops with insecticidal Bacillus thuringiensis (Bt) traits, which limit the need for additional insecticides. However, the prevalence of Bt crops in some regions has led to resistant insect populations, providing an opportunity for insecticide growth in certain markets. Insecticides are widely used in warmer regions, where the local climate provides a hospitable environment for insect populations to flourish. Insecticides are also associated with more concerns related to environmental safety and public health. For example, organophosphate demand continues to drop due to concerns over potential adverse effects. In addition, neonicotinoid insecticides, prominent replacements for organophosphates, may be implicated in honeybee colony collapse disorder. Demand for insecticides in the future will continue to be impacted by changing insect management practices, amid concerns about environmental and human health.
Higher value specialty types to boost fungicides
Fungicide demand is projected to show strong gains as growers in all regions of the world shift away from commoditytype products like copper and sulfur, in favor of higher value specialty fungicides. This change is substantially impacted by a growing need to increase agricultural productivity, particularly in countries that are dependent on fungicide- heavy crops like rice. Additionally, the high value of crops like grapes and other specialty crops motivates farmers to invest in new fungicide technologies. This growth is expected to be fastest in developing regions, where the synthetic fungicide markets are less mature.
Global Demand for Agricultural Pesticides to Approach $59 Billion in 2016
Going forward, growth in global formulated pesticide demand will return to more sustainable levels following strong gains from 2006 to 2011, with sales forecast to reach $59 billion in 2016. The world agricultural pesticide industry has been transformed by several years of robust growth coupled with new environmental regulations and changing crop mix trends. Increased farming of biofuel crops and the use of genetically modified (GM) seeds caused pesticide sales in Argentina and Brazil to more than double between 2006 and 2011, with Brazil surpassing the US to become the largest market in the world. China became the fourth largest national market (and will surpass Japan to become the third largest by 2016) as rising pesticide production in the country improved domestic pesticide availability and facilitated sharply increasing utilization rates. Developed countries, especially in Western Europe, have seen significant shifts in product mix due to the advent of more stringent regulations. These and other trends are presented in World Agricultural Pesticides, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
The fastest growth in pesticide demand is expected in developing countries in Eastern Europe, South America, and Asia. Growing production of rapeseed and cereal crops, along with improved farming techniques, will drive demand in Eastern Europe. Ukraine and Russia will offer strong growth potential due to their low utilization rates compared to other European countries. In contrast, demand growth in Western Europe, Japan, and South Korea will be weak, hindered by market maturity and already high use rates. A shift in product mix and the use of integrated pest management (IPM) techniques will restrain growth in Western Europe.
Herbicide resistance continues to be an issue and is driving demand for new formulations with multiple active ingredients, which will command higher prices going forward. While insecticide demand will benefit from the adoption of higher-priced, safer products, growth will be restrained by environmental concerns, the use of IPM techniques, and the popularity of insect-resistant crop varieties. Fungicide demand will be affected by two trends in product mixes: the switch to synthetic fungicides over commodities in developing regions; and the need for more sophisticated, effective products in developed nations.
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