March 10, 2016
Wellesley, Mass., March 10, 2016 – As of December 2015, falling commodity prices, decreasing trends in crop prices and shrinking profit margins are forcing farmers and agricultural communities to opt for low-cost fertilizers instead of costly chelated micronutrients. BCC Research reveals in its new report that demand for crop micronutrients will be volatile over the next few years, but the industry should recover after 2017 due to a price rise in the commodity sector, yielding robust growth in the market for the remainder of the forecast period.
The global market should reach almost $4.8 billion and $7 billion in 2015 and 2020, respectively, reflecting a five-year compound annual growth rate (CAGR) of 8%. In terms of volume, the global agriculture micronutrients market is expected to increase from 1.2 megatons in 2014 to almost 1.6 megatons in 2020, reflecting a five-year (2015-2020) CAGR of 5.5%.
The growth of the agriculture micronutrients industry depends on multiple exogenous factors, such as the cyclical nature of the future business environment, performance of the agriculture commodity market, the seasonal impact on raw material prices, awareness of farmers in developing countries toward latest agricultural technologies and the extent of merger and acquisition activities.
From 2014 to 2016, consumer opinion of micronutrient fertilizers remained weak due to the poor performance of the agriculture commodity market. During the same period, the drop in farm level income negatively influenced the buying behavior of consumers for micronutrients. To strengthen the value chain to create a buffer against tight profit margins, leading agrochemical players are participating or expected to participate in merger and acquisition activities, which will likely influence the future of the agriculture micronutrients market.
Key market drivers include rising awareness toward micronutrients deficiencies in plants, increasing demand for food enriched with micronutrients, greater demand for both high-yield food production and specific micronutrients (such as zinc) for child nutrition.
Due to the low-cost benefits of non-chelated micronutrients, these micronutrients are gaining importance in countries from Asia-Pacific. An expanded product portfolio of crop micronutrients based on bio-soluble chelating and environment-friendly chelating agents is expected to boost the future demand of agriculture micronutrients. Growing applications of unconventional micronutrients such as selenium also are expected to direct future growth of the market.
“In the last two years to three years, decreasing crop prices, volatility of commodity market and lack of interest from buyers to spend on agricultural chemicals have negatively affected the overall growth prospect of this industry,” says BCC Research analyst Sinha G. “In such context, most of the leading chemical vendors are planning to sell their agrochemical units or merge with other players. Due to such uncertainty in the agrochemicals industry, vendors are opting for niche segments such as crop nutrients that can drive future growth. Because of these economic and industry specific factors, the agriculture micronutrients market has huge potential, and is expected to experience significant growth during the forecast period.”
Crop Micronutrients: Global Markets (FOD073A) analyzes the demand side and supply side factors such as rising demand for higher volume of food products caused by rise in population globally, decrease in per capita arable land, increase in demand for nutritional values in food items, increase in cereals production and innovation of new products related to crop micronutrients. Analyses of global market drivers and trends, with data from 2014, 2015, and projections of CAGRs through 2020 also are provided.
Editors and reporters who wish to speak with the analyst should contact Steven Cumming at steven.cumming@bccresearch.com.
Crop Micronutrients: Global Markets( FOD073A )
Publish Date: Mar 2016
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