Market Overview
Agricultural inoculants, also known as beneficial microorganisms, can be used in agriculture as amendments for soil and plants. Various types of microorganisms are used in agriculture, as plant growth promoters, nutrient providers, and plant-protecting natural elements. Agricultural inoculants are applied to improve plant nutrition, and can also be used to promote plant growth by stimulating plant hormone production.
Inoculants Market Dynamics and Trends
The shift in the trend toward the adoption of organic and environmentally friendly farming practices to drive the market growth
The consumer demand for organically produced goods continues to grow significantly, presenting opportunities to farmers across the world. There has been a significant change in eating habits and preferences among people globally. In the US, organic food sales rose 5.9% in 2018 to reach USD 47.9 billion, according to the 2019 Organic Industry Survey released by the Organic Trade Association. The sales of organic fruits & vegetables made up 36% of all organic food sales in 2018, rising 5.6% to USD 17.4 billion. Organic fruit & vegetable sales accounted for nearly 15% of all US fruit & vegetable sales in 2018. According to an article published under the Agricultural and Processed Food Products Export Development Authority (APEDA), India was ranked ninth in terms of the world’s organic agricultural land, and in terms of the total number of producers, it was first as per the 2018 data. In the same year, the country produced about 1.70 million tons (2017–18) of certified organic products, including food products, namely oilseeds, pulses, cereals & millets, fruits, and vegetables. Thus, countries such as the US and India are expected to be the key revenue generators in the global inoculants market.
The rise in organic farming practices has led to increased consumption of agricultural inoculants. Since agricultural inoculants comprise beneficial microorganisms that help improve the nutrient availability in soil, reduce inputs of chemical fertilizers, and promote sustainable agriculture, their use has also increased significantly in recent years.
Moreover, the increasing demand for food triggered as a result of the increasing populations will drive the agricultural inoculants market. According to the UN Department of Economic and Social Affairs, the world population will reach approximately 8.1 billion in 2025. Thus, there is a global need for increased agricultural production which can be met by the addition of inoculants to promote the growth of plants. However, along with the advantages of agricultural inoculants, there are certain factors such as short shelf life which can hamper the market growth of the global inoculants market.
Inoculants Market Segmentation and Shares
The fungal segment is expected to be the fastest-growing segment with a CAGR of XX% during the forecast period.
The global inoculants market has been segmented by microbes into bacterial, fungal, and others. The fungal segment is expected to grow with the highest CAGR of XX% during the forecast period. Fungal inoculants help plants to absorb phosphorus and other nutrients for use. Mycorrhizal fungi live in plant roots and are well-known for their ability to provide phosphorus to plants. The demand for fungal microbes is projected to increase in the coming years, with the rise in organic farming practices at a global level.
Based on crop type, the cereals & grains segment is estimated to account for the largest share of the market in 2020. Cereals and grains include wheat, corn, barley, and rice crops. The US is a major wheat-producing country. According to the USDA, wheat ranks as the third majorly produced crop among the US field crops, following corn and soybean. Apart from this, Brazil is the largest producer of corn and is also ranked among the top producers at a global level. According to the US Department of Agriculture’s World Agricultural Supply and Demand Estimates, the country’s corn exports was 35 million MT during 2018-2019, due to which it is the second-largest corn exporter at a global level, after the US.
Inoculants Market Geographical Analysis
North America is expected to dominate the global inoculants market
By geography, North America is expected to dominate the global inoculants market in the year 2020, growing with a CAGR of xx% during the forecast period. North America is developing new agricultural technologies and successfully applying those in domestic farming systems. Most agricultural inoculants are used in oilseed crops and maize. Hence, the demand for agricultural inoculants is expected to rise in the future due to the faster adoption of new technologies to increase crop productivity while minimizing the negative impact on the environment. Considering the market potential of the inoculants in the region, companies are investing to gain a stronger foothold in the market and to cater to the soaring demand. For instance, in 2017, BASF expanded its manufacturing facilities in Saskatoon for biological inoculants production. The company has invested approximately CAD 10 million ($8 million) in the expansion project.
Inoculants Companies and Competitive Landscape
The global inoculants market is highly fragmented with key manufacturers such as Advanced Biological Marketing Inc., BASF SE, Bayer, BrettYoung, and Novozymes among others. Few international players having a diverse and expanding product portfolio occupy a higher market share which can be attributed to their highly diversified product portfolios and the large number of acquisitions and agreements that they are engaged in. The major players are also focusing on R&D activities, expansion of product portfolios, increasing their geographical presence, and aggressive acquisition strategies. For instance, Bayer launched the biological soybean inoculant, CTS 500, in Brazil in 2019.
COVID-19 Impact on Inoculants Market Growth
COVID-19 didn’t make a significant impact on the market as the demand for inoculants continues to grow, because agriculture is an essential commodity and most counties rely on those sectors for economic as well as other related services. There has been a negligible impact on global supply chains and operations. Despite the lockdown and closure of borders by various governments worldwide, the inoculants market continues to register steady growth during that period. Agriculture is an essential commodity as there are certain seasons for the cultivation of useful and imperative crops such as wheat, grains, cereals, and others. Farmers and other agricultural players cannot afford to waste and avoid the cultivation period, despite the pandemic. Avoidance will lead to huge losses which is a negative setback for farmers, governments, and other stakeholders involved.