Global BCA market sees strong growth at 7% per annum
The global biocontrol agent (BCA) market is estimated to be worth around $3bn and growing at a rate of 7% p.a, significantly above the rate of conventional crop protection products. We forecast the BCA market to reach $6bn by 2030.
It comprises around 1000 active ingredients distributed between 4 sectors: microbials, plant extracts, semiochemicals and macrobials. Of the 4 sectors microbials is by far the largest, accounting for around 60% of the estimated $3bn market, followed by macrobials, plant extracts and semiochemicals.
There are multiple drivers behind the market growth: Environmental, Social, and Governance (ESG); pull from the food chain; agricultural policy; fast track regulatory systems for BCAs; increasing pressures on conventional crop protection products; insect, disease and weed resistance to conventional crop protection products; innovation and technological advances.
With this high profile comes a lot of media and analytical coverage. The current Ukraine-Russia conflict has once again demonstrated the fragility and vulnerability of global food supply chains, and crop protection is no exception here.
The European Commission has already called for increased domestic plantings of grains and oilseeds this year, which will necessitate higher supplies of both conventional and biological crop protection products, as well as other key inputs such as fertilizers, biofertilizers, and insect pheromones for integrated pest management (IPM) methods.
On the other hand, there are some restraining forces, such as the narrower spectrum of biological activity of many BCAs compared to conventional broad spectrum crop protection products, ongoing challenges over stability and shelf life, and the complexity of IPM systems incorporating BCAs, which necessitates a higher level of training, education and stewardship.
Europe and North America each account for around 30% of the BCA market, with BCAs accounting for around 8-9% of those regional crop protection markets. Asia and Latin America account for 20% and 16% respectively. Europe has achieved this share despite having a less favourable regulatory environment than most other regions. This may be about to change with recently introduced new regulations for microorganisms.
Over 500 companies are involved in the BCA and biostimulants market, many companies selling both types of product. They range from large-diversified companies, agricultural input companies, agribusinesses and specialist biologicals companies, both start-ups and established. By our estimation, few of the companies currently generate more than $40m in sales of BCA's.
The market is highly competitive, with relatively low barriers to entry compared to those for conventional crop protection. For the leading products there are multiple suppliers and brands. The challenge for many of the 'long tail' of companies is to develop innovative or differentiated solutions and to establish market access channels. A large amount of venture capital is flowing into the sector reflecting the growing attractiveness of the sector to investors.
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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