If you watch the news regularly or pick up your local paper a few times a week, the odds are that you’ve seen the words “food crisis” thrown around quite a lot lately. The fact is, with the exponential growth rate of today’s population and the dramatic climate changes being faced across the globe, it’s becoming near impossible to produce enough food for everyone.

Through farmers’ desperate attempts to address this problem, The Global Crop Protection Chemicals Market has emerged, and it’s been growing incredibly fast. Indeed, as of 2012 revenues were sitting at an all-time high of US$52.41 billion.

We at TechNavio are skeptical that this rate of growth will be sustainable for the next few years however, based on two issues outlined below:

• Market maturation in major regions like North America and Europe

The past decade has witnessed a colossal increase in the call for Crop Protection Chemicals, but this demand is slowly beginning to plateau—especially in the US and Western Europe. Once the market becomes fully saturated, little can be done to promote further growth.

• Increased regulations limiting the use of pesticides

The media is filled these days with reports on the negative effects of the use of pesticides and fertilizers. Residues of Crop Protection chemicals lead to bioaccumulation and contamination of the food chain and consequently, several countries are adopting regulations to limit the use of pesticides.

Nevertheless, none of this is to say that crop protection chemical vendors have seen the last of their profitable days. In fact, our analysts forecast a CAGR of 5.93 percent for the market in 2012-2016—a small number yes, but significant enough to boost revenues by almost $US 15 billion.

The basis of this growth comes down to a few trends.

Firstly, is the global increase in demand for biofuels. The feedstocks for biofuels consist of mass amounts of canola, rice, and wheat—all of which are grown with crop protection chemicals therefore influencing the market positively.

Secondly, we have the agricultural world’s mass adoption of GM technology used in conjunction with crop protection chemicals for optimum harvest yields. Globally, the area of land cultivated with GM crops is forecast to reach 241 million hectares by 2016, which will of course directly correlate with demand for pesticides and fungicides.

Lastly, is the increasing popularity of biopesticides which are eco-friendly and not subject to the same regulations as chemical based pesticides. In fact the governments in several countries are actually encouraging the R&D of biopesticides by providing subsidies and other forms of support for vendors.

So what’s the final verdict?

When it comes down to it, the Global Crop Protection Chemicals market may be slowing down in terms of growth rate, but this is in no way indicative of a lack of product demand or a future decline in revenues. As is the case in even the most flourishing industries, it’s inevitable that numbers will eventually begin to plateau. But, when we’re talking about plateauing in a multi-billion dollar market, this isn’t much to worry about.

For more info, view our 2012-2016 report on the Global Crop Protection Chemicals Market