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Agrochemicals and Fertilisers Market Report


Description: The apparent UK market value for synthetic fertilisers and agrochemicals is estimated by Key Note to have declined by 19.5% from around £2.48bn in 1996 to slightly under £2bn in 2000. The biggest drop in sales is in fertilisers where sales have fallen by 35.1% from £1.33bn to £865m, but sales of pesticides have remained virtually static over the same period at £1.15bn. Agriculture and the horticultural industry are the biggest users of fertilisers and pesticides, accounting for around 70% of their total consumption, with its other users divided among forestry, grassland, amenity facilities, golf courses, local authority parks, and industrial and home gardening outlets. Although the use of fertilisers and pesticides is essential for crop growth and for protection against pests, the supply industry is beset by many problems that have intensified in recent years and have seriously affected its current sales and further prospects. The agricultural industry, its biggest customer, is experiencing a decline in demand for many of its products and there has been a steep fall in prices. The policy of heavily subsidising farmers to continue increasing production almost regardless of cost, which created large surpluses over actual demand, is being reversed and many farmers are now subsidised to take some of their land out of cultivation. Environmental groups have successfully lobbied the Government and consumers to espouse the cause of organic farming, which ostensibly uses only natural animal and vegetable fertilisers and biocontrol agents rather than chemical pesticides, to reduce crop damage. Despite the strict controls and regulations that govern the ingredients and use of chemicals in synthetic fertilisers and pesticides, there is increasing public belief that natural products are superior to synthetic products. They are claimed to be more beneficial to the environment, as they leave no chemical residues that could be potentially damaging to human health and wildlife. Grocery supermarkets are allocating more shelf space in their stores to sell organically-produced foods, and more farmers are being attracted to the prospect of obtaining higher prices for this type of product with less intensive cultivation and lower costs of production. Key Note's forecasts of the apparent market in the UK up to the year 2005 indicate that the market for synthetic fertilisers and agrochemicals will continue to fall but at a shallower rate than during the 5 years from 1996 to 2000. Supply and demand will be in better balance than it was at the start of the new trend, and the adjustment to alternative methods of farming should be completed in this period. The attractions of organic farming to the wider buying community, with its higher prices, may not last as it contradicts the public's demand for cheaper food, which is a constant theme in the daily press. Consequently, the total apparent market in the UK is expected to decline by around 10.9% in the next 5-year period, from £1.98bn in 2001 to £1.76bn in 2005.




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