Market analysts said that under the background of global advocacy for decarbonization and energy transformation, the world’s agriculture is undergoing major changes. At present, global agriculture needs not only to feed the growing population, but also to cope with the pressure of agricultural residues and carbon emissions. In terms of crop protection, the usable range of crop protection products is still shrinking, while the drug resistance of pests is still increasing. To this end, in 2023, crop protection product suppliers are vigorously promoting innovation to help farmers increase production with more sustainable formulas or digital solutions.
At present, the global agricultural production needs to continue to increase to meet the global demand for food and bioenergy. Areas outside high-income countries also need to improve agricultural productivity. This gives important technical iteration impetus to agrochemicals.
Peter Axes, president of R&D and supervision of BASF Agricultural Solutions, said that many factors are accelerating agricultural transformation. These factors include the EU green agreement, China’s carbon neutral strategy, India’s national priority strategy and the country’s legal pressure on major products, which have led to the transformation of agrochemical suppliers from a single product provider to an overall system provider, including seeds and characteristics, crop protection and digital solutions. At the same time, the number of solutions available to farmers is decreasing, and many pesticides with high sales are also under legal or regulatory pressure. According to S&P’s global data, from the perspective of value, 8 of the top 20 active ingredients, namely glyphosate, mancozeb, imidacloprid, 2,4-D, atrazine, paraquat, chlorpyrifos and fluconazole, have been subject to regulatory and legal review since 2019. The regulations to reduce the use of pesticides also force farmers and suppliers to rethink how to grow food. For example, the EU’s green agreement hopes to reduce the use of chemical pesticides by half and increase the proportion of organic farming land by 25%.
Therefore, it has become an innovation priority for agrochemical suppliers to let farmers increase their output with less investment. They are achieving this goal through a large amount of research and development expenditure on new traits, biological agents and digital solutions.
Bob Wright, head of research and development of Bayer’s crop science department, said: “Based on the challenges of global climate change and population growth, the importance of innovative agriculture is particularly prominent.” He stressed that Bayer is developing a new herbicide. It is reported that this is the first new mode of post-seedling weeding in the field in 30 years. It uses multiple weed control methods, which is of great significance to the practice of reducing greenhouse gases, such as managing herbicide resistance and promoting the formation of no-tillage agriculture. At present, this herbicide is in the third stage of testing.
Aix said that the research and development of innovative formulations to overcome drug resistance was also a priority of BASF. Previously, BASF and Kodihua Agricultural Technology announced plans to jointly develop complementary herbicide technologies.
Digital solutions help farmers use products more effectively. Aix said that in BASF, the agricultural decision-making engine combines intelligent digital agricultural products with intelligent machinery. The intelligent spraying solution provided can save up to 70% of herbicide dosage and reduce the impact on biodiversity.
Market participants expect that the increasingly strict regulatory environment for traditional crop protection products will expand the market of biological pesticides. S&P Global estimates that the global biocontrol agent market will be worth about US $3.3 billion in 2021, accounting for only about 5% of the total crop protection market, and is still a relatively niche product. However, its growth rate is far higher than the 2% annual growth rate of traditional crop protection products in the past 10 years. By 2030, the demand for biological control agents is expected to reach US $6 billion.
According to the analysis of S&P’s global crop science team, the global chemical crop protection market achieved a 6.2% growth in 2022, with a market value of $69256 million. Among them, the sales of all pesticides, including non-crop pesticides, increased by 5.8% to 78.193 billion US dollars; The sales of non-crop pesticides reached US $8.937 billion, up 3.1%. Following the impact of the COVID-19 epidemic in 2020 and 2021, the main factors affecting the global crop protection product market in 2022 are the Russia-Ukraine conflict, macroeconomic and climate change. The conflict between Russia-Ukraine conflict has especially exacerbated the energy and food security crisis around the world, which has further exacerbated the inflation that has occurred in many major developed markets. In addition, serious weather anomalies have also occurred around the world, resulting in a rapid increase in the price of active ingredients for crop protection. Accordingly, in 2022, agrochemical enterprises ushered in a bumper harvest year. S&P Global forecasts that the global crop protection market will reach US $82 billion by 2030, with a CAGR of 2.5%. Agrochemical enterprises will enjoy stable growth in 2023.