(I-BusinessNews.Com, November 09, 2019 ) The agricultural micronutrients market is estimated to reach USD 5.83 Billion by 2017, and it is projected to reach USD 8.81 Billion by 2022, at a CAGR of 8.60% from 2017. In terms of volume, the market is projected to reach 1,681.1 KT by 2022. This market is growing in accordance with the increasing soil deficiency and increasing demand for biofuels.
How is the increase in contract farming in various countries presenting growth opportunities for manufacturers in the agricultural micronutrients market?
Major food processing players have adopted the strategy of backward integration to gain raw materials of assured quality, quantity, and price benefits. In contract farming, companies provide the requisite agricultural inputs. Companies carry extension programs to educate farmers. They also perform land preparation in which soil testing is conducted. Farmers are provided with micronutrients to enhance the quality and productivity of output. Integrated nutrition is an important part of contract farming across the world. The major market participants in contract farming are PepsiCo, Punjab Agro Industries Corporation in India, Indu-Farm (EPZ) Limited in Kenya, Coffee Board of Zambia, and Coffee Growers Association in Zambia. The increase in contract farming is expected to further drive the usage of agricultural micronutrients.
Increase in soil deficiency
Since the last two decades, micronutrient deficiencies in the soil have been increasingly evident, especially the deficiency of zinc and boron. Zinc micronutrient deficiencies are witnessed across the globe; however, they are more common in growing economies such as India, Brazil, and China. Excess application of inorganic fertilizers is one of the major reasons causing soil deficiencies. Originally, soils are deficient in one or more micronutrients; however, increased intake of nutrients by high-yielding crops has caused a heavy shortage of micronutrient elements (iron, manganese, zinc, copper, boron, nickel, and molybdenum). According to the International Fertilizer Association (IFA), currently, almost 50% of the world’s cereal crops are deficient in zinc, which is leading to poor crop yields. Zinc deficiency is the fifth leading risk factor for diseases in developing countries. A decreased uptake of micronutrients due to interaction with other soil components and an increased demand for high-yield crops are the two major reasons for micronutrient deficiency.
Intensive usage of fertilizers, chemicals, and farm irrigation is responsible for reducing the level of micronutrients in the soil. Reduction of the supply of micronutrient to crops reduces productivity and damages the quality of crops. To maintain the nutrient level in crops and soil, micronutrient plays an important role, which in turn drives the market growth for agricultural micronutrients.
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Why is the need for sustainable approaches to source raw materials posing challenges for manufacturers in the agricultural micronutrients market?
Currently, there is a need to introduce a sustainable approach for sourcing of raw materials for the production of agricultural micronutrients. The growth of sourcing of raw materials globally is leading to an increased carbon footprint of the companies. This poses a challenge for the different operators of the supply chains as sourcing from local suppliers providing quality raw materials is essential to maintain sustainability and the quality of the end product. Identification and grading suppliers, based on the quality of raw material provided, allow manufacturers to maintain quality throughout the value chain of the product.
Market Ecosystem
The various contributors involved in the value chain of agricultural micronutrients include manufacturers, suppliers, distributors, intermediaries, and customers; agricultural product manufacturers such as BASF (Germany), Dow Chemical (US), AkzoNobel (Netherlands), Agrium (Canada), Land O’Lakes (US), Yara International (Norway), The Mosaic Company (US), and Helena Chemical Company (US); government bodies & regulatory associations such as the Food and Drug Administration (FDA), Food and Agriculture Organization (FAO), and Food Safety Australia and New Zealand (FSANZ).
The Asia Pacific region dominated the agricultural micronutrients market in 2016 and is projected to grow at the highest CAGR from 2017 to 2022, both in terms of value and volume.
India is projected to be the fastest-growing market in the region. In India, the growing awareness towards the benefits of micronutrients among growers drives the agricultural micronutrients market. It is a leading producer of many other agricultural commodities such as spices, pulses, fresh fruits, cashew nuts, coconut, and tea. It is also one of the top producers of cereals such as sorghum and pearl millet. The country ranks second in terms of agricultural production in the world. According to the World Bank, the total agricultural land in India was around 60.4% in 2014. Agriculture contributed to 17.3% of the total GDP of India in 2016.
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