Agricultural Micronutrients Market Analysis

Agricultural Micronutrients Market (Global, 2024)

Introduction

The Agricultural Micronutrients Market is expected to play a vital role in enhancing crop productivity and ensuring the sustainability of agriculture, in the face of the rising demand for food and the growing planetary challenges. The Agricultural Micronutrients Market consists of trace elements such as zinc, iron, manganese, and copper, which are essential for plant growth and development and affect various physiological processes. The Agricultural Micronutrients Market is gaining traction as farmers and agronomists seek to optimize yields and improve soil health, owing to advancements in farming practices and the increasing awareness of the importance of nutrient management. The rising prevalence of nutrient deficiencies in soils in various regions is a strong driver of the Agricultural Micronutrients Market. The Agricultural Micronutrients Market is characterized by a wide range of products, such as chelated and non-chelated micronutrients, that are used for different crops and soil conditions. The interplay of technological innovations, regulatory frameworks, and consumer preferences is shaping the Agricultural Micronutrients Market, making it a dynamic and essential component of modern agriculture.

PESTLE Analysis

Political

In 2024, the governments of more than thirty countries subsidize the use of fertilizers. For example, the European Union allocates about one billion and a half million dollars to encourage farmers to use fertilizers that are micronutrient-rich, with the goal of improving the health of the soil and the yield of the crops. And the free trade agreements negotiated between the United States and Canada might have an effect on the import and export of agricultural products, with a possible reduction in tariffs on micronutrient-rich products, which could affect the balance of the market.

Economic

The agricultural sector is expected to contribute $ 3 billion to the world economy by 2024, and micronutrients play a vital role in increasing the productivity of crops. The average cost of micronutrient fertilizers is about $500 per ton, and this is a major cost factor for farmers. In the last year, zinc and boron prices rose by more than 15 percent, causing a further increase in the cost of micronutrients.

Social

In the last decade, the public’s awareness of food quality and nutrition has increased. According to a survey, some 65 per cent of consumers are willing to pay a higher price for food products that are enriched with micronutrients. This is particularly true in developed countries, where the demand for food products that have been fortified is particularly strong. Agricultural organisations are also working with a million farmers worldwide to explain the importance of micronutrients for the quality of crops and for tackling malnutrition.

Technological

In the developed countries, more than forty percent of the farmers have adopted precision farming. Farmers are now able to apply micro-nutrients with greater precision using sensors in the ground and drone applications, reducing the waste and increasing yields. Nano-encapsulated micro-nutrients have also become a reality. Trials have shown an increase in the uptake of nutrients by up to 20 per cent, with the potential to boost the performance of crops.

Legal

In recent years, the regulatory framework for the use of agricultural inputs has become more and more stringent. The EPA has now issued a new set of rules for the use of micronutrients that require micronutrient products to be tested for their safety and effectiveness. In the year 2024, about 200 micronutrient products have been registered under the new rules, thereby ensuring that they meet the safety standards. Moreover, the European Food Safety Authority (EFSA) has set a deadline for 2025 for all micronutrient products to be labeled in a new way, which will also affect the launch of new products.

Environmental

The impact of agricultural practices on the environment is being studied, and research shows that the misuse of micronutrients can cause the degradation of the soil and the pollution of the waters. It is estimated that by 2024 twenty-five per cent of agricultural land will be at risk from a lack of balance in the supply of micronutrients, which is why the authorities are launching initiatives aimed at encouraging sustainable farming practices. Moreover, organic farming is growing: the world’s organic agricultural area increased by ten per cent between 2014 and 2015. Organic farming often uses natural sources of micronutrients, which influences the demand for micronutrients.

Porter's Five Forces

Threat of New Entrants

The market for agricultural micronutrients has medium entry barriers, owing to the need for specialized knowledge and technology. The market is growing, but it may be difficult for new entrants to establish distribution channels and gain market share from established players. However, increased interest in sustainable agriculture may encourage new entrants.

Bargaining Power of Suppliers

The bargaining power of suppliers in the market for agricultural micro-nutrients is relatively weak. There are numerous suppliers of the raw materials used in the manufacture of micro-nutrients, and this creates a highly competitive market. In addition, many companies are able to obtain raw materials from several suppliers, reducing their dependence on a single supplier.

Bargaining Power of Buyers

The buyers in the agricultural micronutrients market have a high bargaining power, owing to the availability of various alternatives and the growing awareness of the benefits of micronutrients. Larger agribusinesses and cooperatives are able to negotiate better prices and terms, which puts pressure on the suppliers to offer a competitive price and quality.

Threat of Substitutes

The threat of substitutes in the agricultural micronutrients market is moderate. There are alternative products, such as organic fertilizers and other nutrients, but the specific benefits of micronutrients for the health and yield of crops may limit the degree of substitution. Nonetheless, as farmers seek to lower costs, the use of substitutes may become more attractive.

Competitive Rivalry

Competition is high in the micronutrient market, with many players competing for market share. Companies compete on the basis of product quality, price and innovation. The presence of large, international companies and smaller, specialised firms intensifies competition, which in turn spurs innovation and marketing efforts.

SWOT Analysis

Strengths

• Increasing awareness of the importance of micronutrients in crop yield and quality.
• Technological advancements in the production and application of micronutrients.
• Strong demand from emerging economies due to rising agricultural activities.

Weaknesses

• High costs associated with the production and application of micronutrients.
• Limited awareness among smallholder farmers about the benefits of micronutrients.
• Dependency on weather conditions affecting agricultural output.

Opportunities

• Growing organic farming trends leading to increased demand for micronutrient products.
• Expansion into untapped markets in developing regions.
• Innovations in product formulations and delivery systems enhancing effectiveness.

Threats

• Intense competition from alternative fertilizers and soil amendments.
• Regulatory challenges and compliance issues in different regions.
• Potential negative impacts of climate change on agricultural productivity.

Summary

The Agricultural Micronutrients Market in 2024 is characterized by high demand, driven by the rising awareness of the benefits of micronutrients and the technological development. High production costs and the lack of awareness among farmers are some of the major weaknesses of the market. Opportunities for growth are in the organic farming sector and in emerging economies. Competition and regulatory barriers may also affect the market's development. Strategic focus on education and innovation is of great importance for the market's development.