The Global Agricultural Biologicals Market: Rising demand for organically cultivated food products is projected to be a key driving factor for the market.

Published Date: 14/05/2021

The global agricultural biologicals market size was valued at USD 7.2 billion in 2020 and is expected to reach USD 13.55 Billion revenue with a compound annual growth rate (CAGR) of 9.4% from 2020 to 2027. Rising demand for organically cultivated food products is projected to be a key driving factor for the market.
Agricultural biologicals, also commonly known as biologics, crucial tools for crop protection as well as production, are derived from natural materials. These products help protect plants against pests and are increasingly becoming an integral part of modern farming practices. Multiple agricultural communities globally have been using these products to establish sustainable farming.

The major strategies adopted by industry participants include investment in research & development and targeting emerging economies for their next growth opportunity. The industry development is still in its nascent stage and the merger & acquisition activities are moderate. The major rationale behind acquisition is either improving product portfolio or expanding geographies. The number of product approvals and investment in bio-ingredients is growing rapidly, which is expected to result in intense market competition in the future.

Moreover, with multiple million-dollar companies working for developing high-performance agricultural products, such as fertilizers and pesticides, the need for alternative eco-friendly products is at its peak. Decades of cultivation practices using synthetic products for aggressive crop yields globally have led to a massive impact on the underground water reserves and soil fertility. These factors have led to the increasing adoption of sustainable farming, which led to the high penetration of organic products.
Biopesticides led the market accounting for the largest share of over 56% in 2020. The segment will expand further at a steady CAGR from 2020 to 2027. This high share is attributed to the increasing consumption of biopesticides in soil, foliage, and turfs, especially across North American and European countries. Some of the key products in this category include insect sex pheromones and scented plants, which attract pests to trap. Microbial pesticides, however, contain active ingredients, which control several types of pests. The highly utilized microbial pesticide includes strains of Bacillus thuringiensis, which forms a protein mix to kill the pests.

The seed treatment method accounted for the maximum market share of over 23% in 2020. This is attributed to the widespread demand for biologicals in advancing seed properties to increase crop yield. Biofertilizers are majorly utilized in seed treatment as well as soil treatment applications. Aggressive consumption of synthetic fertilizers and a multitude of other crop care chemicals, such as pesticides and insecticides, over the past couple of years, has led to a substantial deterioration in soil quality across all major agrarian economies.

The cereals & grains application dominated the market with a share of 41.6% in 2020. This is attributed to growing demand for wheat, rice, corn, barley, and millet across the globe. Furthermore, multiple microbiological advancements in determining the suitable composition of agricultural biologicals for application in wheat cultivation have resulted in high demand for biologics, thereby boosting segment growth.

North America led the market in 2020 and held a major share of over 35%. The region will expand further at a healthy CAGR over the forecast years due to the strong presence of global agricultural product manufacturing companies, with majority of the producers concentrated in the U.S. The growth is also attributed to the constantly evolving agricultural practices in the region with respect to farming techniques, technological adaptations, and constant research & development, and government regulations promoting sustainable farming methods.

North Dakota, California, Montana, Wisconsin, and New York are among the largest states practicing organic cultivation. The demand for agricultural biologicals in the U.S. rose significantly as agricultural communities recognized the degrading underground water reserves and soil quality due to the aggressive use of chemical-based fertilizers and other agricultural inputs for decades.

Key players are: Novozymes A/S; BASF SE; Bayer CropScience LLC; Lallemand, Inc.; CBF China Biofertilizer AG