China’s
sterilant herbicide market is mostly represented by the four pesticides
glyphosate, glufosinate-ammonium, diquat, and paraquat. According to CCM, all
of the four herbicides have experienced a price boom at the end of 2016, which
is likely to continue in 2017 as well.
Ex-works
price of diquat 40% TK in China, Jan.-Dec. 2016
Source:
CCM
2016
was a difficult year for Chinese manufacturers of sterilant herbicides. They
had to endure a depression of the market and low prices for quite a while. In
the end of 2016 however, the main four sterilant herbicides in China all have
shown a significant price rise, due to increasing demand and shorter supply in
general.
The
strengthened demand mostly occurred from the stockpiling of pesticides for the
winter. On the one hand, many pesticide formulation manufacturers have
increased their purchase of pesticide technical for that reason, on the other
hand, increased quotes from overseas suppliers have several enterprises turned
their head to Chinese suppliers and ordered there, which increased the market
demand as well.
The
tight supply of pesticides still results of the governmental actions regarding
air pollution in China’s most important pesticide producing provinces. These
provinces are Beijing, Hebei, Shanxi, Shandong, Henan, and Sichuan. The
governmental actions mostly affect production limitation or stop of
manufacturers in the high pollution industry, like the pesticide industry.
CCM
believes, that these measurements are not done yet. Enterprises are very likely
to bear even higher burdens in the new future, due to the environmental
protection efforts of the Chinese government. This will continue to keep up the
short supply of pesticides in China and therefore the price high.
Another
factor for the short supply of pesticides is the heavy snowfall in northern China,
leading to transportation problems of raw materials and supply shortage.
The price development
According
to CCM, the glyphosate 95% technical price in China hit is the lowest point in
July 2016, able to rise again in a higher degree every month until December,
where it hit the value of USD3,491.87/t. The overall rise since the low value
of July 2016 represents 38.63%. That is one of the largest increases in the
last two years, says CCM.
The
ex-works price of glufosinate ammonium 95% technical in China experienced a
large drop in the first half of the year 2016, down to USD16,496.21/t in July.
The price stayed long for a couple of months, until it showed a large increase
in December again, up to USD21,824.21/t. This rise was an overall boom of
32.30%.
From
January till October 2016, the ex-works price of diquat 40% TK in China hovered
on a low level around USD6,000/t. However, in the last two month of this year,
the price skyrocket finally to a value of USD6,547.26/t in December. That is an
increase of more than USD500/t since October.
The
fourth sterilant herbicide CCM analysed is paraquat 42% TK. This pesticide went
through a permanent price decrease from February to July 2016, stayed on a low
level until November until the price rebound again in December 2016. The price
hit the mark of USD1,600/t in that month.
What’s
more, CCM believes, that the uptrend price of pesticides will continue in 2017
as well. Firstly, the price for grain is likely to continue rising in 2017,
which will automatically increase the demand for pesticides as well. Secondly,
the governmental forced production cut off many enterprises may even become
stricter, which will balance out the present overcapacity and leads to a higher
pesticide trend in general.
Also,
the total number of Chinese pesticide manufacturers is shrinking continuously.
More costs in environmental protection and the lack of funds have led to a
shutdown of several small and mid-size enterprises in China, increasing the short
supply even more.
About CCM:
CCM
is the leading market intelligence provider for China’s agriculture, chemicals,
food & ingredients and life science markets.
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