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Indonesia Agrochemical Market to be Driven by Growing Pesticide Registrations & Increasing Awareness about Product Usageqrcode

Jan. 28, 2020

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Jan. 28, 2020
From the past 5 years, there has been very little growth in the area of arable land available in the country; however, the demand for food has been persistently increasing. This could result in a shift towards the adoption of more agrochemical product usage and mechanization in the farming process. In 2018, Indonesia recorded an arable land of 571.1 sq km in the country.

The agrochemicals market in Indonesia is expected to witness a drive towards sustainable, cost-effective crop protection chemicals to ensure that input costs remain as low as possible due to limited financing resources available with farmers.

Approximately 10.0%-12.0% of the pesticides circulating in the Indonesian market are either illegal or counterfeit in nature. This acts as a major challenge for manufacturers thereby decreasing their overall revenue in the country. Apart from this, the companies have to regularly organize counterfeit drives to raise product awareness which results in a further increase in their operating expenses.

Shift towards Sustainable, Cost-Effective and Environment-Friendly Methods of Production: Owing to the integrated pest management system in the country, Indonesian farmers are shifting towards sustainable and organic methods of production, which would increase the demand for Biopesticides and other organic products in the country. Also, with increased regulations such as RSPO, there is a greater need for developing organic substitutes for chemicals used in agriculture by manufacturers.

Prolonged Dry Seasons: In the past 5 years, Indonesia suffered from dry seasons by approximately 3-4 times which majorly impacted production and sales of agricultural products in the country. Prolonged dry seasons are expected to occur again in the future and given Indonesia’s high dependency on rainfall for irrigation, there is a greater need for farmers to adopt alternative methods of increasing productivity such as increased usage of pesticides, fertilizers and other crop nutrient providers.

Increased Investment in Research & Development Activities: International companies in Indonesia on an average spend 10.0%-13.0% of their yearly revenue on research & development activities in order to develop new active ingredients in the country, which would supplement the launch of new product types in the market. Several companies such as Bayer, BISI and FMC have lined up their product launches in upcoming years depending on the growing trends and demand in the market.
Source: Ken Research

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