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Crop Protection: Growth will ease after a strong year

by Jean-François Tremblay
January 13, 2014 | A version of this story appeared in Volume 92, Issue 2


Markets don’t outperform forever. In 2013, the value of the global agrochemicals market expanded nearly 8.9% to $55.8 billion, according to the Scottish consulting firm Cropnosis. But 2014 will be less outstanding, with growth of only 4.4%.

“It’s partly because of crop prices that are generally lower,” says Leon van Mullekom, Southeast Asia business leader for crop protection at BASF. “The farmers have to consider their return on investment.”

Cropnosis’s forecast assumes that no nasty weather pattern develops in the coming months. Pacific Ocean temperatures have so far been stable, says Gautam Sirur, the firm’s principal consultant, which indicates that no El Niño or La Niña system is developing. During El Niño or La Niña years, devastating floods or droughts can harm harvests.

Growth rates vary widely among the different segments of the crop protection industry. In 2013, seed treatments were the highest performers, with growth of more than 13%, and they will continue to outperform this year, Sirur expects. “Farmers are buying high-value seeds that increase yields or produce special breeds,” he says.

Growth in herbicide demand will slip from its double-digit rate but still outperform the crop protection market as a whole this year, Sirur expects. One reason for the relative strength of herbicides is that farmers are being forced to use more expensive products as weeds become resistant to glyphosate, a weed killer made popular by Monsanto as Roundup.

Over the medium term, developing countries will generate much of the growth in crop protection, BASF’s van Mullekom expects. In Southeast Asia, for instance, Laos, Cambodia, and Myanmar are important and completely new markets, he notes.

Across the developing world, one trend underpinning crop chemical growth is the rise of agriculture as a professional occupation. “As older farmers retire, their children do not take over the farm,” van Mullekom says. “So small family farms get merged, and this gives rise to professionalization.”

In recent years, the world’s major agricultural chemical firms have boosted their sales and distribution infrastructure in the developing world to tap the potential there as farmers become more technology savvy. Although 2014 will likely be a slow one for the crop protection industry, it might just be a period of rest before a rebound.



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