Market Trends of South Africa Agrochemicals Industry
Increasing Demand for Bio-based Agrochemicals
- South Africa's export portfolio prominently features citrus fruits, including oranges, lemons, acid limes, grapefruits, and, to a lesser extent, tangerines. Data from The Research Institute of Organic Agriculture FiBL reveals that in 2022, organic cereals occupied 2.2 thousand hectares, while citrus fruits were cultivated on 1.1 thousand hectares. As a major supplier of fresh fruit to the European Union, South Africa set a record by shipping 18,863 metric tons of citrus fruits. With the country's robust export potential in organic produce targeting international markets, a notable increase in the consumption of bio-based agrochemicals is on a surge.
- South Africa has a burgeoning opportunity for bio-based crop protection products, especially those without residues. This is of paramount importance for export markets. The scope encompasses traditional crop protection solutions, biological products, and bio-stimulants. Notably, crop protection companies are channeling investments into these biological products. The biological products outperform conventional chemical products, especially in the export crop arena. Also, tightening environmental regulations are poised to influence the herbicide and insecticide markets. Producers increasingly prioritize sustainable pest control, adopting integrated pest management systems and programs, which bodes well for market growth.
- As chemical fertilizer prices continue to surge, more individual farmers are pivoting toward biofertilizers. In 2023, a farmer from Tsolo in the Eastern Cape crafted an economical biofertilizer, targeting local farmers struggling with high fertilizer expenses. This innovative biofertilizer is formulated using a mix of four native mycorrhizal fungi species. The key ingredient, mycorrhizal fungi, combines activated carbon from biochar, serving as its carrier. This potent duo boosts the plant's ability to absorb and make the most of soil nutrients and water. Such advancements are poised to introduce novel products in the fertilizer segment.
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Rising Exports of Fruits and Vegetables to Drive Production
- In 2023, South Africa's agricultural industry achieved remarkable export milestones. According to Trade Map data, exports of fruits and vegetables surged to a record USD 4.55 billion, with fruits constituting over 99% of the total. Dominant exports included citrus, maize, apples, pears, nuts, grapes, berries, and avocados. Both increased volumes and rising prices drove this surge in export activity. Notably, the increase in export prices for South African fruits could stimulate heightened production and a surge in demand for agrochemicals.
- Exports were strategically diversified across several key markets. In 2023, the African continent led the charge, representing 38% of South Africa's agricultural export value. Asia followed as the second-largest market, accounting for 28%, trailed by the European Union at 19%. The Americas secured the fourth spot with 6%, while the remaining 9% was distributed to other global markets. The United Kingdom stood out in the 'Rest of the World' segment, accounting for 7% of total exports.
- South Africa stands out as a top global producer and exporter of grapes. As per ITC Trademap, the nation's grape exports reached a valuation of USD 714 million. However, grape crops in South Africa face challenges, notably from downy mildew. Commercial vineyards regularly implement fungicide spray programs to combat diseases like powdery mildew and Botrytis bunch rot.
- Due to increasing exports, the country is ramping up its production. This surge in production is expected to bolster the agrochemicals market, given the essential role in sustaining these production levels.
