COVID-19 outbreak has been declared a pandemic by the WHO,
causing a huge impact on people’s lives, families, communities and businesses.
As of 7th July 2020, US has been leading in terms of total number of
positive cases registered i.e. over 3.2 million with clusters around New York,
Seattle and in the California. The state of New York (which was once stated as
the epicenter), now have lowest infections in the country, but other states such
as Texas and Florida are seeing increase in number of COVID positive cases. Being
a developed nation, US economy faced an unconventional shock followed by
reduction in productive capacity as a consequence of lockdown and shortage of
healthcare equipment & healthcare workers. However, the US government
followed certain counter-measures to deal with the long term consequences of
unemployment. Additionally, the size of resources put behind the relief package
(put in place by US government) has collectively surpassed the collective set
of efforts taken across Europe and other regions.
The pandemic continues to take its toll on both large scale businesses
& MSMEs. Businesses must evaluate the financial as well as operational
challenges caused by COVID-19 while rapidly addressing the needs of their
clients / end users and suppliers. The infection has spared only a few
businesses, mostly offering healthcare products-services, while many other sectors
for instance, travel and tourism, hospitality and food & beverage
industries experienced major disruptions. It led to closure of work places,
shopping malls and restaurants which further reduced demand for numerous
activities in the short as well as long term. Data estimates from the U.S.
Census Bureau showed April’s monthly sales for retail purchases in stores & online spending at bars and restaurants totaled USD 403.9
billion thus, resulting into a decline of 16.0% from the previous month and over
21% lower than the same time last year.
The severe effect of the corona virus pandemic on low-wage
workers was also briefly stated by “the Peterson Institute for International
Economics” which said that approximately 40% of the US house-holds in February
were making less than USD 40,000 per year and had lost their jobs in the month
of March.”
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Most businesses are focusing on survival as the markets have
become highly uncertain and are socially distant. E-commerce on the flip side
is expected to see over 20% growth in 2020, majorly driven by increased uptake
of online shopping from consumers who shifted online while brick-and-mortar
stores were closed. As a result of which, players are increasing budget towards
online and social media advertising as US adults are expected to continue
spending more time on social media post pandemic. Amongst the North American
region, US is one of the leading countries with 288.1 million internet users
(87.0% penetration), 353.2 million mobile phone connections and 230.0 million
active social media users (70.0% penetration) therefore, highlighting the
growing digital base which has enforced more significance and greater
participation of E-commerce activities in multiple sectors.
Impact
on Agrochemical Business:-
Corona virus outbreak has hit supply chains across the world
thus, causing disruptions and trade tensions. Compared to large industries such
as energy, tourism and airline services which are more affected, the
agrochemical industry is smaller in size however, and it is closely related to
food production. In addition, the US chemical industry has been severely
affected due to oil price shock. The country being a net export of
disinfectants and other agro-chemical based products saw decline in terms of
value and volume over the past few months. Exporters of raw materials are
facing issues as US factories remain shut and a prolonged trade halt will
impact margins and profitability of any company. Agrochemical prices which were
going down during last year saw a rapid surge of 20-25%. Thus, any sort of global
movements are restricted by major players due to possible infections at airport
/ transit airports causing a negative impact on sales activities. The
functioning of domestic pesticides industry may not be affected immediately by
halt in production levels as the country is currently in possession of
inventories for the next 2-3 months. As manufacturing and logistics are slowly
recovering with ease in lockdown restrictions, the US government must help
local manufacturing companies by granting registration from the USEPA (The
United States Environmental Protection Agency) and manufacturing licenses by
states. The virus has impacted major agrochemical producers from raw materials
to finished products. US is one of the major producers of both active
ingredients that form the base of formulated agrochemical products, and
ready-made conventional pesticides.
Impact
on Agricultural Activities:-
Agriculture is a labor-intensive industry however the COVID
pandemic has led to non-availability of labor because people are self-isolating
or travel instructions are in place thus, causing bottlenecks in harvesting,
packaging and transportation activities. Disruption in terms of food produce /
supply will be mostly felt by farmers, small businesses & medium sized
companies. Agriculture, food and related industries contributed over USD 1.0
trillion to country’s GDP i.e. over 5-6% in the past few years. In accordance
with the USDA, around 22.0 million full and part-time jobs were related to the
agricultural and food sector i.e. 11.0% of total U.S. employment during 2018.
USDA service center employees continue to assist agricultural producers with
disaster assistance, conservation, safety net & farm loan programs and
services such as conservation planning and acreage reporting while supporting
flexibilities for producers and implementing the Corona Virus Aid, Relief, and
Economic Securities (CARES) Act. Additionally, US Small Business Administration
(SBA) offers multiple programs available to agricultural producers whose
operations have been impacted by the corona virus pandemic.
Strategies Adopted by the Market Players: -
The US-headquartered company FMC has followed
procedures to ensure the health & wellness of employees, including
alternative work arrangements, travel restrictions and other measures. The
company recently formulated a business continuation plan and its commercial
teams are focused on supporting customers and ensuring farmers have the
products they need. Additionally, they have sufficient product stock to meet
anticipated customer needs for the immediate future. FMC’s sales &
marketing & technical service teams continue to operate fully.
Farmers Business Network (FBN) is a US data and
pesticide E-business Company which has recently announced a discount sale of
more than 80 kinds of key seeds and pesticides with 15.0% discount on top of
the current low prices, which will further aid farmers to cope up with the
financial stress during the pandemic, which happens to be a planting season. Products
can be ordered online & can be further delivered from more than 70 FBN
warehouses across the US. Given the epidemic circumstances, offline sales saw a
huge decline and therefore, the online selling mode in the near future will
play a more significant role.
Domestic demand as well as exports for
agrochemical products is largely affected due to the global lockdown situation
causing a decline in terms of production capacity. Major focus is also being
given on marketing the products in a safe & sanitized manner across US to
regain the confidence of end users.
Shifts in the Industry Practices:-
For agrochemical companies, disruption of their
supply chain network will pose major risk. Another major challenge is changing
suppliers or manufacturers which might not be easy, since changing source of
material will require updates on product registration. Unless emergency status
is granted by governments, changing or adding a new source may take at least a
year or longer, before getting approval from any national authority according
to the current pesticide registration regulations in the US.
Comprehensive measures are taken by agrochemical
manufacturers to make sure the restrictions to control outbreak will not
potentially lead to halt in agribusiness globally.
Looking at the agricultural commodities under the
current circumstance reported by the USDA, US companies have increased production
of pasta and rice to meet the growing demand by consumers worried by the
COVID-19 crisis.
In the coming months, shortage of raw materials
and products might occur together with further transportation interruptions. Agrochemical
players need to bridge possible financial bottlenecks due to the material
shortage, production stoppages and falling demand in the markets. Under the
current circumstances, it is important to ensure the smooth flow of trade and
to make use of the international market as vital tool to secure supply and demand.
Key Segments Covered:-
Product Type
Herbicides
Glyphosate
Atrazine
2,4-D
S-Metolachlor
Acetochlor
Dicamba
Others
Insecticides
Organophosphates
Carbamates
Pyrethroids
Neonicotinoids
Other
Fungicides
Chlorothalonil
Mancozeb
Other
Other Agricultural Pesticides:-
Fumigants
Defoliants
& Desiccants
Rodenticides
Nematicides
All
Others
Pesticide Form
Liquid
Granules
Powder
Market Structure
Organized
Market
Unorganized
Market
Crop Type
Cereal
Fruits
Vegetables
Others
Key Target Audience:-
Venture
Capitalist Firms
Agrochemical
Manufacturers
Raw
Material Suppliers
Research
& Development Institutes
Government
Bodies & Regulating Authorities
Herbicide
Manufacturers and Distributors
Insecticide
Manufacturers
Fungicides
Manufacturers
Time Period Captured
in the Report:-
Historical Period: 2013-2019P
Forecast Period: 2019P–2025F
Companies Covered:-
Bayer
Syngenta
BASF
Corteva
Agriscience
FMC
Corporation
Others
(ADAMA Agricultural Solutions, DOW Chemical, Du Pont, Monsanto, Nufarm and
Sumito Chemical)
Related Reports:-
Brazil Agrochemical Market Outlook to 2025 – By Type
of Pesticides (Herbicides, Insecticides, Fungicides and others), By Generic and
Patented, By Form of Pesticides (Liquid, Granules and Powder), By Market
Structure (Organized and Unorganized Sector), By Type of Crops (Cereal Crops,
Fruit Crops and Vegetable Crops), By Region (Mato Grosso, Parana, Sao Paulo,
Rio Grande do Sul and Others)
Europe Agrochemical Market Outlook
to 2025- By Herbicides (Based on Phenoxy-Phytohormones, Triazines, Carbamates),
By Fungicides ( Based on Inorganic, Benzimidazoles, Triazoles), By Insecticides
(Based on Pyrethroids, Organophosphates, Carbamates), By Biopesticides
(Bioherbicide, Bioinsecticide, Biofungicide), By Country (France, Spain, Italy,
Germany, Poland), and By Application (Cereals, Fruits, Vegetables)
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
+91-9015378249
