The current status and development of the global pesticide industry market

The global pesticide industry returns to the growth channel

From the 1960s to the 1990s, with the gradual advancement of agricultural modernization and mechanization, the world's pesticide industry was in a stage of rapid growth. In 2017, due to the rebound of international crude oil prices, the price of related basic materials rose, and the weather conditions improved. The sales of pesticides have begun to rebound. On the supply side, my country's high-pressure environmental protection situation continues, and the industry competition pattern has further improved. In 2018, on the one hand, the price of the main basic raw materials and intermediates increased, which led to the increase in the price of technical materials. On the other hand, the global agrochemical giants entered a new round of restocking cycle, and demand was gradually released. Sales in the global agricultural pesticide market It was USD 57.561 billion, an increase of 5.97% year-on-year, and the global pesticide market returned to the growth channel.

Asia Pacific and Latin America are the main markets for pesticide demand

In 2019, the sales of pesticides in the Asia-Pacific region and Latin America were US$17.204 billion and US$16.676 billion, ranking first and second respectively. The growth rate of the Latin American market in 2019 was as high as 17.60%, mainly due to the gradual digestion of stocks in Brazil, the world's largest demand for pesticides. The tightening of China's environmental protection policies has led to the increase in the price of technical medicines, which has promoted the increase in product demand and product prices.

Agrochemical giants occupy most of the market share

After years of fierce competition and mergers and acquisitions, the global agrochemical industry has initially taken shape. Syngenta (acquired by ChemChina), Bayer (acquired Monsanto), BASF, Cortiva (Dow and DuPont merged after the split Formed) as the first group of multinational companies that accounted for nearly 60% of the global pesticide market. The development model of international agrochemical giants has the characteristics of technological innovation, the entire industry chain, rich product types, integration, and internationalization. The above-mentioned companies mainly focus on the production of preparations and the development of new products, forming a monopoly on pesticide creation, thereby consolidating their dominant position in the global pesticide market. The global pesticide industry and market are highly concentrated, and the monopoly advantage of international multinational companies will not change in the short term.

Herbicides, insecticides, and fungicides occupy most of the market share

The global crop protection market is dominated by herbicides, fungicides and insecticides. In 2018, the global market size of herbicides, fungicides, and pesticides was 24.608 billion U.S. dollars, 16.319 billion U.S. dollars, and 14.549 billion U.S. dollars, accounting for 42.75%, 28.35%, and 25.28% of the global crop protection market, respectively.

The development trend of global pesticide industry

1. The difficulty of pesticide innovation increases and the life cycle of pesticide products extends

After decades of development, pesticides have gone through a period of rapid expansion of large-scale products, and the product categories are gradually complete. After continuous product development, large-scale pesticides have also undergone several generations of product upgrades and replacements, and the market application range has been greatly expanded. There has also been a significant improvement; however, as the requirements for pesticide application continue to increase, such as response to resistance, safety and greenness, improved product utilization, and decline in biodiversity, the difficulty of discovering new pesticide ingredients worldwide has increased significantly, making the efficiency of pesticide research and development slow down. More time is needed for research and development of new products; at the same time, the application needs of the market are met by adopting formulation improvements such as compound formulations for existing pesticide products, thereby extending the overall life cycle of existing products.

2. Intermediate and API outsourcing is an important form of global industrial transfer

With the continuous integration of downstream international pesticide giants, the market for upstream intermediates and API suppliers will also gradually become concentrated. With the mergers and acquisitions of international pesticide giants, the number of long-term cooperative suppliers will be reduced compared to before, which will drive leading intermediates and APIs to obtain more orders from giant customers and continue to increase market share. It is expected that in the future, with the reconstruction of the value of the pesticide industry chain, the development space of domestic intermediate and API companies will be further improved.

3. Expired patent products dominate the market

With the expiration or expiration of patents, the original pesticide production links have undergone corresponding changes. For the mature and expired patent products of the series of products and the products that are about to expire, the enterprises that undertake the production of intermediates and APIs have adopted technological innovation and process optimization. Provide customers with market-competitive professional and systematic solutions, thereby reducing costs, enabling customers to obtain price advantages and extending product life cycles.

Because the international pesticide giants have strong formulation sales channels and brand advantages, they can still occupy a major market share after the pesticide patent expires. At the same time, due to the expiration of the patent, the number of manufacturers gradually increases, and the price of the original patented product will increase. The decline has brought the market application of products into a situation of accelerating heavy volume. Manufacturers of APIs and intermediates are closely related to downstream customers. After the patent expires, as downstream demand increases, the market share of expired patent products gradually increases.

4. Strengthen the control of the pesticide industry

The pesticide industry is a highly regulated industry. In recent years, countries have strictly controlled the production, sales and use of pesticide products, and formulated relevant restrictive measures for some pesticides. For example, New Zealand issued a notice in April 2017, revoking the registration of some brands of chlorothalonil preparations, and at the same time adopting stricter restrictions on some branded preparations containing chlorothalonil. Users need to undergo professional training and certification before they can use it. ; In May 2019, after completing the reassessment of 2,4-D, the Brazilian National Health Inspection Agency decided to maintain the registration of the herbicide, but the concentration, personnel, protective equipment, buffer settings, maximum Regulations have been made for the use dose, and all current residue limit standards have been revised.