Fast-Growing Fungicide Markets

Talk among watchers of worldwide crops indicates the global use of fungicides will continue to outpace the insecticide and herbicide markets as farmers continue to take advantage of favorable soft commodity prices and invest in higher yields. Meanwhile, manufacturers of fungicides plan to address diverse world climates and market conditions.

The global agrochemical market will keep growing in the future – around 2.2% annually between 2010 and 2015, according to Phillips McDougall. However, fungicides are expected to have a higher growth rate than insecticides, so in the mid term (by 2015) fungicides will have a higher market value than insecticides.

“In 2009 and 2010, we didn’t see quite as much fungicide growth as we expected,” says Matthew Phillips, partner at Phillips McDougall. “That was primarily due to later warm weather.

In 2011, we saw early spring. Fungicides are primarily a crop-driven market that drives yield. When you’ve got increased wealth and economic conditions, you’ll generally see more fungicide usage. As go good crops, here come fungicides.”

Early seasonal crops in Europe and South America tend to have a trickle-down effect for fungicide use by farmers in the United States, he adds. “We’re looking at three seasonal applications, the third being the most expensive. All have a ‘greening effect’ that keeps crops fresh. When the economics are right, farmers will invest vast monies to bolster yields.”

Significantly, high soft commodity prices also play a key role in fungicide usage. A primary indicator of the soft commodity market is cotton. For example, the US market saw historic levels of increases in 2010 with prices spiking 80% in summer months to the $1.30-a-pound range. “Due to high soft commodity prices, farmers have been willing to invest in their crops and apply fungicide even in situations with less disease pressure,” says Elise Kisling, BASF head of media relations, crop protection.

Five products currently drive the fungicide market. 

  • Azoxystrobin ($1 billion annually)
  • Pyraoxystrobin ($700 million)
  • Mancozeb ($600 million)
  • Chlorothalonil ($535 million)
  • Copper-based fungicides ($450 million)

A new trend emerging among fungicide manufacturers is treating “disease complexes” with chemicals that stem more than one disease state. These hydrogenate inhibitors “kill a whole trend of diseases. It’s like taking medicine for headache and having it treat your headache and your allergy at the same time,” Phillips says.

The main requirements for fungicides today are effective disease control, broad spectrum control, physiological effects, use restriction due to the regulatory profile, maximum residue levels, resistance management, and easy-to-use formulations.

“BASF is planning to address the needs of farmers with several new technologies. In fungicides, the main innovations will be Xemium, which has an active ingredient for broad-spectrum disease control in a wide range of crops for reliable and flexible use, which provides higher yield and improved quality, and Initium, which has an environmentally friendly chemistry with a new mode of action for vine and vegetable growers,” Kisling says.

An increase in worldwide demand for high-quality food is perhaps the most compelling factor driving fungicide use. This is particularly true of driving the yield of Europe’s wheat and barley, fruits and vegetables, soybeans, rice, and maize, Phillips says.

Feeding a growing world population is daunting to today’s farmers. “Today’s growers face a huge challenge: They will be instrumental in feeding a growing global population,” says Pete Thomas, global portfolio manager, DuPont Crop Protection. “We will need to double food production by 2050 if we are to meet this escalating need. Clearly, improving crop productivity and protecting food quality is part of that equation.”

People in rapidly developing countries including China and India are demanding higher volumes of food, he says, and seeking more nutritious food. Those desires are increasing demand for many commodities, from grains to protein sources, which has in turn put upward pressure on commodity prices.

“So you can see we are serious about helping growers feed the world,” Thomas says. “Toward that end, we have developed collaborative approaches to research and development that are bringing new crop protection solutions to market more effectively and in concert with countries around the world.”

As growers begin to see the benefits of fungicides in helping them achieve this goal, they are more willing to invest in the technology. The more willing they are to invest, the more valuable crop protection is to the marketplace.

• Generic Agrochemical Companies Report Growth in 2010

“At DuPont, we see this as an opportunity to work with our customers to provide fungicide answers that help them continue to improve the health, quantity and quality of their crops in the face of the world’s growing food security challenges,” Thomas says. “Quite simply, it’s good business for them and it’s good business for us.”

DuPont has been working with customers and regulators in regions around the world to launch several new fungicides in a family of products based on picoxystrobin under the brand names DuPont Approach and Acanto, which are already in use in a number of regions. Approach is slated for launch in the United States in the second quarter of 2012, pending regulatory approvals. In addition, the company anticipates regulatory approval to launch two other new fungicides, Fontelis and Vertisan, by year-end in the United States.

Look for China, India and Brazil to emerge as countries that will drive the growth for agrochemicals and consequently fungicides, Phillips says.

Together those three countries will represent almost 40% of agrochemical market growth until 2015. However, growth coming from the United States, Canada, Germany and France together will represent 15 percent of the agrochemical market growth, according to statistics supplied by BASF.

“Growers adopt technology based on their specific local needs, pests and value that technology delivers,” says Paul Minehart, head of corporate communications North America, Syngenta.

In 2010, emerging market fungicide volumes were up significantly in Latin America and Asia linked to increased technology adoption as well as disease pressure, Minehart says. In the first half of 2011, it has seen growth in fungicide sales across all regions, notably in North America.

“Growers make their buying decisions based on need and value delivered,” Minehart says. “A combination of agronomic and market demands combined with advanced technology has impacted the uptake and use of fungicides.”

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