Melbourne, Australia (PRWEB) April 03, 2014
Historically, the biggest factor influencing the Pesticide Manufacturing industry in Australia was the level of agricultural output and income. Over the past five years, however, industry revenue has been significantly affected by extreme weather conditions, with both widespread drought and flooding. The rapid growth in generic products as key patents expire has also influenced the industry's operating environment, pushing prices downwards. Another increasingly important variable influencing the industry's performance has been the regulatory framework governing the pesticide value chain. According to IBISWorld industry analyst Arna Richardson, “as consumer concerns over the use of pesticides within the food chain have increased, so too have industry regulations – particularly as residual detection methods have become more sophisticated.” The withdrawal of a number of active ingredients in view of human health concerns has had implications for the industry's product portfolio, as has the escalating costs associated with bringing new active ingredients to market.
This explains the downward trend in industry revenue over the past few years, with revenue expected to fall by a further 0.8% in 2013-14, representing the fourth consecutive year of contraction. The industry is forecast to be worth $1.0 billion in 2013-14, and this equates to an annualised fall of 1.5% over the past five years. Domestic demand for the year is expected to reach $1.5 billion, indicating the strong role of industry imports. Within the immediate future, the industry will continue to contend with rising environmental, health and safety concerns over pesticide usage. The organic farming movement and the use of new farming practices that adopt a more holistic approach to pest control are expected to gain ground, as is the size of crop areas dedicated to genetically modified (GM) crops. “Alternative pesticides including bio-pesticides and new pest control products developed with new technology platforms will make headway, as the lines between crop protection and crop production become increasingly blurred,” says Richardson.
The industry exhibits a high level of concentration, and is dominated by major players Nufarm Limited, Bayer CropScience Pty Ltd and Syngenta Australia Pty Ltd. Over the five years through 2018-19, revenue growth will remain constrained by increasingly stringent environmental controls, growing consumer distrust and demand for environmentally friendly food. Regulatory reform will be another key issue affecting the Pesticide Manufacturing industry in the immediate future.
For more information, visit IBISWorld’s Pesticide Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry is concerned with companies that are involved in the formulation and preparation of pest control chemicals designed to control pests, weeds or fungi. Predominantly geared towards the agricultural sector, the three main product types are herbicides, fungicides and insecticides. It also includes ready-to-use products used by non-agricultural users including households, the turf industry and professional pest management companies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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