Industrial hemp is an agricultural commodity and is highly dependent on climatic conditions, regulatory tolerance, and availability of labor. Countries such as China, the world’s leading producer of hemp, have never restricted cultivation and have an advantage of inexpensive labor.
Growing population and rising disposable income are expected to result in an increased demand for high-quality hemp-based 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 projected period. Rising demand for hemp oil in food and beverages owing to growing awareness regarding dietary advantages of hemp oil is expected to propel demand.
Analysts expect the global industrial hemp market size is expected to reach USD 5 billion by 2020, according to a new report by Grand View Research, Inc. The market is anticipated to expand at a CAGR of 14.0% during the forecast period.
Increasing R&D activities to develop perfect agronomy and new genetics of crops to obtain high yield and improved product quality have a positive impact on hemp production. Companies in the market operate with fiber treatment technology to make fibers water repellent, fire retardant, absorptive, and super soft, which is expected to drive demand.
However, oversupply is likely to be a major concern for manufacturers over the forecast period.
Further key findings from the report suggest:
- Product consumption in the textile industry is expected to witness a CAGR of 16.9%, in terms of revenue, from 2018 to 2020 due to strong, hypo-allergic, and UV light resistant characteristics of hemp fibers
- 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
- 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
- Major players in the industry focus on R&D activities to develop new varieties of the crop, full crop utilization, processing methods, and advanced technologies used for processing.