A new Freedonia Group analysis projects global demand for formulated pesticides to increase 3.4% per year to $94.7 billion in 2025, supported mostly by growth in the dominant agricultural market due to:
- increasing agricultural productivity on a per hectare basis
- changes in crop mix, increased access to a wider range of pesticide formulations, and improved farmer education
Although the COVID-19 pandemic impacted the various sectors of the global pesticide industry differently, the overall market was largely sustained by the fact that agriculture and food production are “essential” activities. As a result, demand for agricultural pesticides was not substantially affected, though there were some instances where global production and trade of active ingredients and other necessary components were disrupted.
Through 2025, the commercial and consumer pesticide markets will see the fastest gains in countries with expanding middle classes and abundant space for gardening and other outdoor recreation. Below, we highlight some of the key trends affecting both near- and long-term market growth.
Pandemic Gardening Trends Are Boosting Near-Term Consumer Pesticide Sales
The consumer and commercial markets for pesticides in the US and other affluent countries with significant lawn and garden cultures were strongly impacted by the COVID-19 pandemic, which led to a drop in residential landscaping services and a significant increase in the number of households participating in lawn and garden activities:
- Increased time at home led many homeowners to take over their own lawn and garden maintenance activities, either because of budget restrictions or because the homeowner was adopting gardening as a hobby.
- Inexperienced and novice gardeners tend to spend more for value-added pesticide formulations and packaging, further boosting consumer sales during the pandemic era.
- Although the share of households with active gardeners is expected to fall off over time, the consumer base will remain elevated, supporting demand for value-added, consumer-friendly pesticides.
As consumer sales grew strongly in 2020, however, the commercial market dipped. In addition to decreased homeowner reliance on professional lawn and garden maintenance services, the closure of many office and retail spaces and public budget cuts caused a substantial contraction in other key commercial markets for pesticides.
As the global population better adjusts to the ongoing pandemic, the pesticide market’s volatility from 2020 to 2021 is expected to settle, as households revert to the use of landscaping and gardening services for managing lawn and garden pest control.
Industrialization & Shifting Crop Mixes to Support Rising Pesticide Application Rates Through 2025
Rapidly evolving agricultural industries in Central and South America, Asia, and Africa will support significant market opportunities for agricultural pesticides through 2025:
- Area dedicated to cropland is expected to increase more in these regions than in the more mature markets in Europe and North America as developing countries continue to shift their agricultural sectors from subsistence to industrialized formats.
- A change in focus from subsistence crops to higher value cash crops for export markets will incentivize farmers to maximize production and to invest in more effective crop protection products.
In more developed agricultural markets, limited growth in cropland will be offset by greater production per hectare, which will require increased spending on pesticides. The focus will be on products that are both effective and generally safe for the environment. These changes are supported by evolving regulatory requirements and a decreasing agricultural workforce, thus increasing the importance of efficiency.
Changing Demographics Will Continue to Support Gains in Developing Nonagricultural Markets
A growing middle class and increasing emphasis on the importance of urban green spaces will support gains in demand in less comprehensive pesticide markets. However, increasing urban population density in a number of countries may limit available space for gardens, and – in many countries – commercial pesticide use will continue to be dominated by insect and rodent control for public health reasons.
For instance, China is a large enough nation that there is an appreciable market for nonagricultural pesticides (such as household pesticides and those used in ornamental horticulture and commercial pest control), although use rates are well below those seen in the US and other highly developed markets for nonagricultural pesticides:
- Increasing numbers of golf courses, greater emphasis on the attractiveness of public outdoor spaces, and an expanding middle class willing to pay for residential landscaping services will support strong growth in China’s commercial pesticide market.
- Per capita spending rates on consumer pesticides in China are among the lowest in the world, due to low personal incomes in more rural areas and very dense populations and severe space limitations in urban areas. However, an increase in the number of medium-sized Chinese cities with suburban residential areas with larger yards will support gains in lawn and garden applications.
Climate Change Will Impact Pesticide Use in Every Region & Market
The ongoing impacts of climate change will continue to affect pesticide requirements in essentially every region and market. Rising temperatures in many parts of the world will alter growing seasons and possibly affect which crop mixes are best suited to a region. Worsening droughts or increased flooding will also affect insect populations, plant disease proliferation, and the spread of weeds, which will force many users to rely on a broader range of pesticide types and active ingredients. For instance, climate change will contribute to greater need for fungicides, particularly in regions that are experiencing increased rainfall in addition to increased temperatures.
Want to Learn More?
Global Pesticides is now available from the Freedonia Group.
About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.