Technavio: Top four emerging trends impacting Indian agrochemicals market through 2020

Technavio’s latest report on the agrochemicals market in India provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

Usage of herbicides and weedicides

The increasing use of herbicides and weedicides is one of the major factors for the growth of the agrochemicals market in India. A shortage of farm labor triggered by migration and social welfare schemes such as NREGA is resulting in increased usage of herbicides in the country, which are cheaper and more economical. The rising labor wage component in the total cost of cultivation is also encouraging the use of herbicides and pesticides.

According to Abhay Sinha, a lead analyst at Technavio for agricultural equipment, “The market for weedicides is growing. Weeding is an important process of the crop cycle, accounting for a considerable amount of cultivation costs. Average farm labor costs have risen by over 125% in the past eight years. The increasing proliferation of genetically-modified crops such as Bt cotton has also opened up growth opportunities for the weedicide segment, thus increasing the market opportunities for agrochemical companies in India.”

IPM as new method of crop protection

Integrated pest management (IPM) is a sustainable approach to pest management that combines biological, mechanical, physical, and chemical methods. These methods are executed in three stages: prevention, observation, and intervention. It is an ecological approach and strives to eliminate or significantly reduce the use of pesticides while maintaining acceptable levels of pest growth at.
Newer molecules with better efficacy are also being developed. For instance, molecules such as sulfonylurea and imidazolinone require a lower volume of chemicals per unit treated area. New products such as biological pesticides, seed treatment chemicals, and semiochemicals are being introduced, which require a small volume of chemicals for treatment as compared to normal crop protection chemicals. This is likely to have a negative impact on the growth of the agrochemical market in India.

Introduction of biopesticides

“Biopesticides offer an ecologically sound and effective solution to pest problems. Based on pathogenic microorganisms particular to a target pest, they are designed to affect only one specific pest or, in some cases, a few target organisms, and are effective in small quantities, often decomposing quickly. They are less harmful and pose less of a threat to the environment and to human health,” says Abhay.
The most commonly used biopesticides are living organisms, which are pathogenic for the pest of interest, like biofungicides (Trichoderma), bioherbicides (Phytopthora), and bioinsecticides (Bacillus thuringiensis).

High post-harvest losses

Post-harvest losses in the Indian agriculture industry are caused by supply chain inefficiency and inadequate infrastructure. In 2013, India's post-harvest fruit and vegetable losses were over USD 30 billion, owing to inadequate cold storage facilities and lack of proper food processing units. “Fruits and vegetables are highly perishable commodities. About 30% of those produced in the country are rendered unfit for consumption due to spoilage after harvesting, hampering the agrochemical market in India,” adds Abhay.

Among the states with the largest amount of post-harvest losses, West Bengal ranks first with losses worth USD 2 billion each year, followed by Gujarat with about USD 1.7 billion, Bihar at more than USD 1.6 billion, Uttar Pradesh at USD 1.5 billion, and Maharashtra at USD 1.51 billion.