According to a new report by Grand View Research, Inc.USA, the global industrial hemp market is expected to reach USD $10.6 billion (INR 7.5 lakh crores approx.) by 2025 and the market is anticipated to expand at a *CAGR (Compound Annual Growth Rate) of 14.0%. Growing population and rising disposable income are expected to result in an increased demand for high-quality cosmetics, personal care products, protein supplements, and other health food products. These factors are expected to be key driving factors for the market over the coming years. The U.S. Hemp industry produced at least $820 million in revenues during 2017, with growth to over $1 billion for 2018, and an expected 14% CAGR through 2022, according the Hemp Business Journal, USA.
In terms of revenue, Asia Pacific is expected to register a CAGR of 15.9% from 2018 to 2025 due to increasing fiber consumption in manufacturing of biodegradable textiles for consumer and industrial applications. Countries such as China, the world’s leading producer of the crop, have never restricted cultivation and have an advantage of inexpensive labor.
With recent legalization of industrial hemp cultivation in Himalayan state of Uttarakhand, India has also taken the first step towards tapping the immense commercial potential of iHemp market. It should be noted that increasing R&D activities to develop perfect agronomy and revival of tradition method of hemp farming of crops to obtain high yield and improved product quality would be the key factors for India to reap the future benefits. There is an old saying, ‘Job well begun is half done’. Major players in the industry are focusing on R&D activities to develop new varieties of the crop, full crop utilization, processing methods, and advanced technologies used for processing
Industrial hemp is an agricultural commodity and is highly dependent on climatic conditions, regulatory tolerance, and availability of labor. Presence of major supplier countries, including China, India, Australia, and South Korea, is expected to have a positive impact on the region’s growth.
Industrial Hemp Fibre Market Insights:
The global market is segmented into product, application, and region. On the basis of product, the global market is segmented into seeds, fiber, and shivs. The seed segment accounts for significant share in the global market; whereas the fiber segment is expected to witness highest growth during the coming years. Fiber accounted for 40.4% of the revenue in 2017 on account of high demand from the textile industry for manufacturing of yarns, spun fibers, and range of consumer and industrial textiles. Hemp fibers are robust, contain high amount of hemicellulose, and have a high absorbent capacity, which makes it useful for the textile industry. The textile industry is one of the largest consumers in the industrial hemp market as it is used in manufacturing apparel, fabrics, denim, fine textiles, and others. Product consumption in the textile industry is expected to witness a CAGR of 16.9%, in terms of revenue, from 2018 to 2025 due to strong, hypo-allergic, and UV light resistant characteristics of hemp fibers.
Shivs are the inner core part of stalks harvested from industrial hemp crop and cost half the value of fiber owing to which, it is majorly used in several application industries. Shivs are majorly used in animal bedding and manufacturing of construction and insulating materials, Rising consumer demand for green buildings owing to increasing environmental pollution is expected to drive the shivs segment over the years. Shivs and leaves are largely used in animal bedding, primarily for poultry and horses, owing to low dust and high absorbent property of shivs. This is likely to further drive market growth over the next few years.
The automotive industry is projected to expand at a revenue-based CAGR of 13.6% over the forecast period on account of stringent regulations regarding usage of harmful synthetic materials all over the world. Different automotive, ground transportation, and aerospace products such as auto parts (i.e., headliners), interior bus panels, and composite parts are manufactured from fibers. This is anticipated to fuel market growth in the coming years.
However, processing facilities extract required components from raw hemp with the help of processing and manufacturing equipment. Low yield availability, lack of harvesting innovations and processing facilities, and difficulties in transporting the product in highly regulated markets are factors hampering market growth.
The political link between industrial hemp and marijuana has resulted in several restrictions on hemp cultivation, processing, distribution, and consumption across the globe. However, increasing liberalization and legalization for hemp cultivation with THC content not more than 0.3 in several countries is expected to have a positive impact on market growth.
Further Key Findings:
- By product, seeds accounted for 42.3% of the volume in 2017 owing to increasing demand for hemp grain to obtain seed, oil, and food matter due to its high fatty acid content and nutritional value
- The personal care industry accounted for 16.2% of the revenue in 2017 owing to high consumption of the crop oil in personal hygiene products including soap, shampoo, body lotions, and hair care products
- The market in North America is expected to register a volume-based CAGR of 17.6% owing to rising product demand in the automotive industry for manufacturing panels and as an alternative to fiberglass
*CAGR is the average returns an investor earns on the investments after one year. The bank or the financial institution calculates this rate in terms of annual percentage.