The total market size of the South African Agrochemicals market is valued at USD 403.51 million in the year 2020. Its market value is expected to growing at a CAGR of 5% within the forecasted time horizon of 2020-2025 because of agriculture as the major source of income, increasing focus on food security and climate change, rising incidences of the infestation and diseases on crops, and increase in farmer’s income

However, ban of a lot of existing active ingredients of pesticides and high cost of agrochemicals might restrain the growth and development of its market. Its market value will reach USD 540.74 million by the end of the year 2026.

• Definition / Scope
• Market Overview
• Market Risks
• Top Market Opportunities
• Market Drivers
• Market Restraints
• Industry Challenges
• Technology Trends
• Pricing Trends
• Regulatory Trends
• Market Size and Forecast
• Market Outlook
• Technology Roadmap
• Distribution Chain Analysis
• Competitive Factors
• Key Market Players
• Strategic Conclusion
• References
• Appendix

Definition / Scope

Agrochemicals are the chemical products used in the agricultural field for the purpose of the management of the ecosystems in agricultural sectors. It includes insecticides, herbicides, fungicides, nematicides, synthetic fertilizers, hormones and other chemical growth agents either in the forms of liquids, granules or powder. In the context of South Africa, the most commonly used pesticides in vegetables crops industry are chlorpropham.

The agrochemicals market is concerned with the development, manufacture, distribution and sale of the agrochemical products. Based on type of agrochemicals, the agrochemicals market is comprised of herbicides (glyphosate, Methotrexate, Triazine, others), insecticides (Pyrethroids, Abamectin, others), fungicides (Triazole, Azoxystrobin, Carbendazim, others), biopesticides, rodenticides, fertilizers, adjuvants, and plant growth regulators. As the application of agrochemicals is concerned, its market is segmented into grains, cereals, oilseeds, fruits and vegetables.

Market Overview

Farming Profile of the South Africa

South Africa is one of the major countries in Africa engaged in the production of agricultural products and is one of the net food exporters with the capacity to export the food on regular basis. Agriculture is the backbone of the economy of the African countries acquiring almost 23% of the total global available agricultural land area. According to the FAO, the cropping area in Africa is about 1,100 million ha. In most African countries, almost 70% of the population is dependent on farming for their livelihood.

In the context of the South Africa, almost 13% of the total surface area is usable for the production of agricultural crops. Here, almost 22% of the total arable land has the highest potentiality for the agricultural production and more than 13 million ha of land is facilitated with the irrigation system. The formal agricultural system is providing the employment opportunities to more than 930 thousand farmers and smallholder sector provides employment to more than 13 million households. Almost 70% of the output from the agricultural sector is used as the intermediate products in most of the manufacturing industry.

In the context of the African region, the South African Agrochemicals Market accounts for almost 35% of the total market value of the African Agrochemicals Market. The total market size of the South African Agrochemicals market is valued at USD 403.51 million in the year 2020, increased from USD 384.3 million in the year 2019. It is expected to reach USD 423.69 million by the end of the year 2020. Its market value is expected to grow at a CAGR of 5% within the forecasted time horizon of 2021-2026. Its market value is expected to reach USD 540.74 million by the end of the year 2026. The agrochemicals market in South Africa is import oriented and mostly dependent on the import of the crop protection formulas from overseas countries.

Based on the type of product, the herbicides segment is leading the market with a market share of almost 50% of the total agrochemicals market in the South Africa. The market size of this segment is valued at USD 201.75 million in the year 2020. Based on application, the maize segment is leading the market with a market share of almost 24% of the total agrochemicals market in South Africa. The market size of this segment is valued at USD 96.84 million in the year 2020.

Agriculture as the major source of income, increasing focus on food security and climate change, rising incidences of the infestation and diseases on crops, and increase in farmer’s income are the major factors responsible for the growth and development of the agrochemicals market in South Africa. However, ban of a lot of existing active ingredients of pesticides and high cost of agrochemicals might restrain the growth and development of the agrochemicals market in South Africa.

The key market players engaged in the operation of this South African Agrochemicals market are Villa, Arysta, Syngenta, Bayer, Dow-DuPont, BASF, ADAMA, Monsanto, etc

Market Risks

• Ban or removal of a lot of existing active ingredients of pesticides

In the context of the South Africa, some of the active ingredients used for the manufacture of the agricultural chemicals are banned. For instance, 2,4-D esters are withdrawn from all the agricultural uses in the western Cape and prohibited in Natal. Some of the key ingredients banned in the South Africa are aldrin, BHC, chlordane, chlordimeform, dimethylamine salt, DDT, Dieldrin, heptachlor, phosphorus containing formulations, etc. The ban and removal of these active ingredients of the agrochemicals might create the risk for the growth and development of the agrochemicals market in the South Africa.

Top Market Opportunities

• Agriculture as the major source of income

Africa is the second largest continent acquiring almost 23% of the total global available agricultural land area. According to the FAO, the cropping area in Africa is about 1,100 million ha. In most African countries, the agriculture supports the livelihood of almost 70% of the population. South Africa is one of the major countries in Africa engaged in the production of agricultural products.

South Africa is one of the net food exporters with the capacity to export the food on regular basis. High level of penetration of the people of the South Africa in the agriculture sector is creating a significant opportunity for the growth and development of the South African Agrochemicals Market.

• Increasing focus on food security and climate change

Globally, the climate change and its impacts on agricultural sector is the issue of concern as it is hugely associated with the food security issues. The issue of the climatic changes and the related extreme weather-related disasters are in rising trend. It has been expected that the number of the extreme weather-related disasters has been doubled since the year 1990.

Because of this, incidences of the novel pest attacks are in rising trend as the changing environment is in the favor of the development of the population of the pests. As a result, the yield of the major crops is declining and. issue of the food security is rising. It has been expected that almost 20% of the South African households has the inadequate access to the food. The increasing focus on the issue of food security is driving the growth and development of the agrochemicals market in South Africa.

Market Drivers

• Rising incidences of the infestation and diseases on crops.

In the context of the South Africa, the incidences of the infestation of the pests in the agricultural crops are in rising trend. For instance, cassava Mosaic and Brown Streak has affected the cassava throughout the Southern and Eastern Africa. It has been estimated that almost 70 million people in Africa are dependent on cassava as a primary source of food.

Along with this, Desert Locust is one of the potential threats with a capacity to consume almost 100,000 tons of crops each day and is affecting the livelihoods of the one-tenth of the world’s population. Similarly, the wheat rusts diseases have caused risked to almost 37% of the wheat plant all over the world.

In the context of the South Africa, the tree species and crops such as avocado, macadamia, stone fruit, wine crops, were attacked by the fall armyworms, Asian fruit flies, polyphagous shot-hole borer beetles, etc. The rising incidences of the pests and their impact on the agricultural production are creating a significant opportunity for the growth and development of the agrochemicals market in South Africa.

• Increase in farming income

The income of farmers in the context of South Africa is increasing and their willingness to pay for the agricultural inputs are also rising. It has been expected that the income of the farmers in the South Africa has been increased by almost 4.3%. Along with this, the prices that the farmers are paying for the agricultural products have been increasing by almost 5%. The increasing adoption of the agricultural inputs and the income of the farmers is creating a favorable environment for the growth and development of the South African Agrochemicals Market.

Market Restraints

• High cost of agrochemicals

The cost of the agrochemicals is quite high in the context of the South Africa. For instance, the price of the bio-pesticides ranges from USD 56 to USD 80 per kilogram while the price of the Ferrous Sulphate ranges from USD 70 to USD 150 per metric ton. The cost of the Acuron produced by Syngenta ranges from USD 51 to USD 58 per gal while the cost of the assure produced by DuPont is about USD 87 per gal.

Because of this, the cost of the agrochemicals isn’t always affordable to the poor farmer of Africa. As a result, it will negatively impact the adoption of the agrochemicals in the context of the market of the South Africa. The high cost of the pesticides, fungicides, herbicides and other agrochemicals might restrain the growth and development of the agrochemicals market in the South Africa.

• Rising organic farming practices & its adoption

In the context of the South Africa, the adoption and penetration of the organic farming is in rising trend. Here, the fully-certified organic farmers are engaged in almost 0.59 hectares of the small size farms for the purpose of the organic farming. The numbers of the farmers involved in the organic farming are increasing by almost 38% within the time horizon of two years. The rising use of the organic farming practices might restrain the growth and development of the agrochemicals in the synthetic agrochemicals market in the context of the South Africa.

Industry Challenges

Highly fragmented market

In the context of the agrochemicals market in the South Africa, lots of foreign players are dominating the agrochemicals market. There are about 180 companies with registered and marketed pesticides in the South Africa. However, almost half of these have one or two registered products. South Africa is largely dependent in other countries for the procurement of the technical for the production of the agrochemical products. It is highly import oriented market.

The major market players engaged in the South African Agrochemicals Market are Belaruskali, OCP, Agrium, CF Industries Holdings, Yara International, Bunge, Potash Corporation of Saskatchewan, E.I. Du Pont De Nemours & company, etc. It is quite challenging for the local market players to establish their market value in the South African Agrochemicals Market.

Technology Trends

Adoption of new and advanced technologies is creating a favorable environment for the growth and development of the agrochemicals market in South Africa. Some of the key technological trends in this agrochemicals market in South Africa are discussed as follows:

Genome editing: It is the cutting-edge genetic recombination technology which is used to generate genetically modified crop species. This technology allows the addition, removal and alters of the particular locations of the genome in the DNA of the organisms.

Clustered Regularly Interspaced Short Palindromic Repeat technology: It is one of the faster, cheaper, accurate, efficient and advanced genome editing technology is applied in the field of the basic research, a medical and agricultural application. It enables the precise manipulation of genetic sequencing and has assisted in the time reduction required for the crop breeding.

Biotechnology: It is the technology which utilizes the part of biological systems and living organisms to create the different products. In the sector of the agrochemicals, the biotechnology is used for the production of the bio-pesticides and other agricultural chemicals.

Pricing Trends

The price of the products of this market depends upon the type of pesticides, brand name, type of ingredients, quantity, and its usage form. For instance, the cost of the Acuron produced by Syngenta ranges from USD 51 to USD 58 per gal while the cost of the assure produced by DuPont is about USD 87 per gal.

The price of the Atrazine 4L by Adama ranges from USD 10.25 to USD 12.3 per gal while the price of the Atrazine 4L by Drexel ranges from USD 9.99 to USD 11.92 per gal. In the context of the South Africa, the average price of the bio-pesticides ranges from USD 56 to USD 80 per kilogram. The price of the Ferrous Sulphate ranges from USD 70 to USD 150 per metric ton.

Regulatory Trends

Some of the regulations directly or indirectly related to the agrochemicals market in the context of the South Africa are discussed as follows:

The Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act: This act has been developed for the registration of the fertilizers, sterilizing plants, pest control operators, farms feeds and other agricultural products. It regulates the importation, sale, acquisition and disposal of these agricultural products.

Maximum residue level guidelines: In accordance to this guideline, the exported agricultural products shouldn’t exceed the maximum chemical residue limits of the importing countries. The record of the chemicals remedies used in the fumigation programs as post-harvest treatment should be maintained.

Market Size and Forecast

In the context of the African region, the South African Agrochemicals Market accounts for almost 35% of the total market value of the African Agrochemicals Market as agriculture is the backbone of the economy of the South Africa. The total market size of the South African Agrochemicals market is valued at USD 403.51 million in the year 2020, increased from USD 384.3 million in the year 2019.

The market value of the South African Agrochemicals market is expected to reach USD 423.69 million by the end of the year 2020. Its market value is expected to grow at a CAGR of 5% within the forecasted time horizon of 2021-2026. Its market value is expected to reach USD 540.74 million by the end of the year 2026.

Based on the type of product

• The herbicides segment is leading the market with a market share of almost 50% of the total agrochemicals market in the South Africa. The market size of this segment is valued at USD 201.75 million in the year 2020.
• The fungicides segment accounts market share of almost 26% of the total market value of the South African agrochemicals market. Its market size is valued at reach USD 104.91 million by the end of the year 2020.
• The insecticides segment accounts for the market share of almost 22% of the total market value of the South African agrochemicals market. Its market size is valued at reach USD 88.77 million by the end of the year 2020.
• The others (adjuvants, plant growth regulators, rodenticides, etc) segment is leading the market with a market share of almost 2% of the total market value of the South African agrochemicals market. Its market value is valued at reach USD 8.07 million by the end of the year 2020.

Based on application

• The maize segment is leading the market with a market share of almost 24% of the total agrochemicals market in South Africa. The market size of this segment is valued at USD 96.84 million in the year 2020.
• The vine segment accounts for a market share of almost 19% of the total market value of the South African agrochemicals market. Its market size is valued at reach USD 76.66 million by the end of the year 2020.
• The fruits & vegetables segment accounts for a market share of almost 17% of the total market value of the South African agrochemicals market. Its market size is valued at reach USD 68.59 million by the end of the year 2020.
• The cereals segment accounts for a market share of almost 11% of the total market value of the South African agrochemicals market. Its market size is valued at reach USD 44.38 million by the end of the year 2020.
• The sugarcane segment is leading the market with a market share of almost 6% of the total market value of the South African agrochemicals market. Its market size is valued at reach USD 24.21 million by the end of the year 2020.

Effect of COVID-19 pandemic on the South African Agrochemicals Market

In the context of the South Africa, almost 1.6 million populations are infected with the novel corona virus till 4^th June 2021 and almost 5668 new cases of COVID-19 disease are identified. There are almost 56,832 deaths from the COVID-19 disease in the South Africa.

The pandemic outbreak of the COVID-19 disease has influenced the production and supply of the agrochemicals in the context of the South Africa because of the short-term shortage of migrant laborers. For instance, Ashok Oza has reported that there are severe supply chain delays in the import of the agricultural machinery.

As almost 60-70% of the nitrogenous fertilizers are imported from other countries, the lockdown and international travel restrictions caused due to this pandemic situation has affected the import of the agricultural chemical products too. Because of this, there is a rise in the retail price of the agrochemicals. Along with this, it has caused the limitation in the marketing and distribution of the agricultural products.

Market Outlook

The agrochemicals market in South Africa is expected to grow at the CAGR of 5% within the forecasted time horizon of 2020-2025 because of agriculture as the major source of income, increasing focus on food security and climate change, rising incidences of the infestation and diseases on crops, and increase in farmer’s income. Its market value is expected to reach USD 540.74 million by the end of the year 2026.

Technology Roadmap

The technological changes occurring in this South African agrochemicals market are driving the growth and development of its market. The major technological adopted in this market are genome editing, biotechnology, clustered regularly interspaced short palindromic repeat technology, etc.

This technology allows the addition, removal and alters of the particular locations of the genome in the DNA of the organisms. The adoption of these technologies is enhancing the efficiency and effectiveness of the agrochemicals product. For instance, bio-technology is used for the production of the bio-pesticides and other agricultural chemicals.

Distribution Chain Analysis

The key stakeholders involved in the operation of this South African Agrochemicals market are producers & manufacturers, agricultural input companies, enterprises operating in the industry, traders & stakeholders operating in the sector, investors interested in the market, distributors, retail sales and end users.  

At first, the raw materials are collected and product manufacturers are engaged in the development of the agrochemical products. The manufactured products are distributed to the end-users through online and retail sales.

Competitive Factors

The key market players engaged in this market are competing for the product portfolio expansion, high investment in research and development activities, mergers & acquisitions, geographical expansion, and collaborations. For instance, the Dow Chemical Co. and DuPont Co. are merged through the approval of the Competition Commission of South Africa.

Along with this, a merge of USD 30 billion has also been occurred between Agrium Inc and PotashCorp. Bayer introduced its own fungicide entitled Luna Experience in the year 2015. They are mostly focused on the production of pesticides in comparison to the fertilizers.  

Key Market Players

The key market players engaged in the operation of this South African Agrochemicals market are Villa, Arysta, Syngenta, Bayer, Dow-DuPont, BASF, ADAMA, Monsanto, etc. Short profile of the key market players engaged in this agrochemicals market are discussed as follows:

Villa Crop Company: It is the leading supplier of the protection solutions with its specialized engagement in the distribution of these products to the distributors in Southern Africa. It is serving more than 300,000 agricultural producers and providing the services in almost 50 countries worldwide.

Arysta Life science: It is the Japanese global producer and provider of the crop protection and life science products. The key products of this company are IVORY, KALASH Herbicide, OMITE Insecticide, PANTERA Herbicide, SELECT Herbicide, VACCIPLANT Biocontrol, etc.

Syngenta: It is the Swiss leading global provider of the agricultural products with its specialization in the production of the crop protection products and particular seeds. Its major products are pesticides, seeds, fungicides, herbicides, nutrients, and insecticides. The revenue of this company is valued at USD 13.58 billion.

Bayer: It is the one of the largest German based multinational company specialized in the production of the consumer healthcare products, agricultural chemicals, seeds, biotechnology products and veterinary pharmaceuticals.

 Dow-DuPont: It is one of the world’s largest American companies engaged in the production of the chemicals. The revenue of this company is valued at USD 21.57 billion. It is formed after the merge of the Dow Chemicals, E.I. du Pont de Nemours and Company.

BASF: It is one of the largest German based multinational companies with its six integrated production sites and 390 other production sites all over the world. Its major products are chemicals, plastics, performance chemicals, catalysts, coatings, crop technology, crude oil and natural gas exploration.

ADAMA: It is the Chinese based crop protection company specialized in the production of the crop protection, food additives, dietary supplements and aroma products. The revenue of this company is valued at USD 3.99 billion.

Monsanto Company: It is the American agrochemical and Biotechnology Company engaged in the production of the herbicides, crop seeds, and genetically modified organisms.

Strategic Conclusion

The agrochemicals market in South Africa is expected to growing CAGR of 5% within the forecasted time horizon of 2020-2025 because of agriculture as the major source of income, increasing focus on food security and climate change, rising incidences of the infestation and diseases on crops, and increase in farmer’s income However, ban of a lot of existing active ingredients of pesticides and high cost of agrochemicals might restrain the growth and development of the agrochemicals market in South Africa.

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Appendix

• USD= United States Dollar
• CAGR= Compound Annual Growth Rate