Market Trends of South Africa Agrochemicals Industry
This section covers the major market trends shaping the South Africa Agrochemicals Market according to our research experts:
Increasing Adoption of Bio-based Agrochemicals
Biopesticides are essentially less harmful than regular synthetic pesticides. Biopesticides typically affect only the target pest and other closely related organisms. Therefore, biopesticides are gaining popularity. Furthermore, the more consumption of chemical fertilizers than recommended levels over the years led to soil acidification. Thus, more biofertilizers are needed to correct the pH value of the soil.
The development of the agrochemical industry had a huge impact on the South African crop protection markets. Increasing the need for food production and the high population and economic growth rate raised the demand for various agrochemicals, such as herbicides and pesticides. Production needs to be increased on low fertile soil that requires a high amount of biofertilizers. This enhances the nutrient availability of crop plants through processes, like fixing atmospheric nitrogen or dissolving phosphorus in the soil, which imparts better health to crops and soil and enhances crop yields. This, in turn, is anticipated to drive the biofertilizer market during the forecast period.
The commercial farming sector produces more than 95% of the total marketed agricultural output. For instance, maize accounts for 41% of total fertilizer applications, whereas sugar cane accounts for 18%, which can be replaced by biofertilizers that increase the sugarcane yield by 20-30 metric ton per hectare as compared to chemical fertilizers, which yield 60 metric ton per hectare as it helps to solubilize phosphorus and potassium, thus, making it easier for nutrient absorption.
Bananas are one of the major crops grown in the Mpumalanga region, which accounts for 42%, and the Kiepersol region accounts for 19% of the total national crop. Biofertilizers, particularly inoculation with Azotobacter, could substitute 50% of the nitrogen requirement of bananas and produce higher yields over full doses of nitrogen application. Therefore, increased demand for bananas over the region may boost the biofertilizer market during the forecast period.
Need for Increased Land Productivity
The main focus of the agricultural sector is to increase productivity and food security in the country. However, the country's agricultural productivity is quite fluctuating over the years as compared to neighboring regional economies. According to the Food and Agriculture Organization, in 2020, the country was showing an increase in the cultivation and production of grains and cereals. The maximum demand for agrochemical products, like pesticides and fertilizers, is from cereal crop growers in the country. For instance, in 2020, maize (corn) production increased to 15,300,000 ton from 11,275,500 ton in 2019. Therefore increase in the production of cereals like maize is anticipated to drive the demand for agrochemical products over the forecast period.
Furthermore, there is a need to increase land productivity, as the area harvested of major crops in the country has been declining. For instance, in 2019, the area harvested for bananas was 6,652 hectares, and it declined to 6,504 hectares in 2020. Similarly, the area harvested for oranges declined to 36,808 hectares in 2020 from 40,413 hectares in 2019. Thus, there is a need to increase the land productivity. Therefore, agrochemicals are used by the South African growers to increase productivity from a limited area, which is powering the growth of the South African agrochemicals market.
