Thailand
is getting closer to ban the pesticides paraquat and chlorpyrifos, due to
safety concerns. As the list of banning countries grows, Chinese manufacturers,
who are heavily dependent on exports, have to consider their destinations
carefully and adjust on time.
According
to Agribusiness Global, Thailand has done the next step in banning the use of
paraquat and chlorpyrifos, when the Ministry of Public Health together with
some NGOs have called for governments back-up in supporting the ban by 2019.
However, some backwind already came from the Department of Agriculture by
claiming the proposed time of effect by 2019 would be too tight to be
realistically achievable.
The
currently existing licenses of the two pesticides will run out in 2019 and cannot
be renewed again. As a result, from 2019 onwards, paraquat and chlorpyrifos
will be prohibited to use in Thailand.
Back
in 2009, the use and sale of paraquat in Thailand were approved to continue by
the Ministry of Agriculture after evaluation by the Thai Toxicology Evaluation
Committee. Crop protection is a hot topic in Thailand, a country with one of
the largest rice yield globally since farmers are urged to produce more crops
each year with less damage on the environment and more sustainable methods.
The
call for banning paraquat in Thailand has become louder, as a study revealed
the danger of the herbicide based on reports by doctors who are treating a
growing number of farmers for illnesses related to the heavy use of such farm
chemicals. After all, according to some hospitals, the doctors there have to
face at least one patient every day who shows symptoms of illness called by
paraquat poisoning. Estimations range up to 1,000 dead people caused by
paraquat in Thailand yearly, of whose many attempted to commit suicide.
The
close connection of Thailand’s government to chemical giants is seen as one of
the problems the change to an environmental friendly farming is moving slowly
in Thailand.
Paraquat
is already banned by more than 50 countries around the world due to its high
toxicity, as already a small amount of consumption could kill a human being.
The herbicide is also known to afflict severe damage to the environment.
Effect on China
China
is the worldwide largest exporter of pesticides, supplying countries all around
the world with comparable cheap agrochemicals. The main export nations are
Brazil and the USA. As more countries are proposing the ban of a growing number
of pesticides for usage for their farmers, China’s manufacturers have to be
careful in keeping up with the development in their main destination.
Paraquat
is the second most exported pesticide from China, while Chlorpyrifos is the
sixth most exported pesticide. Together they had a share of 18% of the top 10
exported pesticides from China in 2016. To be noticed, Glyphosate alone already
had 47% of the total share.
Of
the export destinations for Chinese pesticides, Thailand was ranked number 8 in
2016, following other South-Asian regions like Vietnam and Indonesia. In
general, South-Asia is the major destinations for Chinese pesticides, due to
the high proportion of agriculture and booming economies. The share of Thailand
for in the 10 largest export destinations has been over 6%. However, the export
volume to Thailand had declined in recent years, which shows the
diversification of China’s exports and lessen the dependence on single markets
like the Thailand market. Hence, an import ban of certain pesticides like
paraquat and chlorpyrifos to Thailand will only affect Chinese manufacturers to
some small extent in the long term, even they highly dependent on exports.
Paraquat situation in China
China's
paraquat consumer market will change greatly in the future. Because of its
fatal toxicity, paraquat is being restricted by the Chinese government on the
domestic market now. The new policy regarding restrictive management measures
for paraquat in China has greatly impacted demand for paraquat in the domestic
market and will continue to do so going forward.
After
the announcement to ban paraquat AS in 2012 and the actual implementation on
July 1, 2016, China government has now revealed to prohibit the use and sales
of any paraquat formulation in China by September 2020. As a result, export
will be the only remaining option for Chinese paraquat manufacturers to sell
their products.
According
to market intelligence firm CCM,
China is the largest paraquat producer worldwide, with a capacity and output
that share about 80% of the world's total. Besides, it is also the largest
paraquat supplier and exporter based on advantages in technologies,
environmental production, costs and equipment.
Earlier
in 2017, also China’s neighbour Vietnam has announced to ban paraquat as well
as 2,4-D from the market. Taiwan is another region announced to ban the
herbicide. The ban will come to effect on February 2019. The announcements of
both governments are likely to affect China’s paraquat exports since Taiwan and
Vietnam are both one of the leading export destinations for China’s paraquat.
In the first four months of 2017, Vietnam was the third largest importer of
Chinese paraquat, while Taiwan was on the seventh rank.
Prospects
for paraquat
formulations in the Chinese market are not optimistic. As of May 2017,
there was only one valid registration for paraquat non-AS formulations in China
which will be expired in Sept. 2018. The solicit opinions manuscript issued by
the MOA on May 9, 2016, had primarily affected the activity of paraquat non-AS
formulations' promotion in the domestic market and technological development,
marking the end of the era of paraquat in the local market after Sept. 2020.
Chlorpyrifos situation in
China
Chlorpyrifos
is one of the main insecticides for export in China. According to CCM, the
market price of chlorpyrifos TC remained stable in the last week of July in
China and is predicted to go down in a short period. There was heavy pressure
on technical producers, and the intermediate was still under tightened supply.
However, some producers reported downward market prices.
In
H1 2017, chlorpyrifos had a tightened supply, which was aggravated by
increasing demand in early 2017 and the prices significantly increased. Then,
the price slightly decreased as the slack season for chlorpyrifos came and the
total supply increased. However, the price was still comparable high. Besides,
the supply of chlorpyrifos raw materials also tightens, which is predicted to
remain in H2.
In
terms of price, it rose by as much as 50% YoY. This was due to a tightened
supply and increasing raw materials prices. The price is predicted to remain
high for the foreseeable future.
The
ban of chlorpyrifos was also proposed in the USA recently, as several senators
called for the Environmental Protection Agency in the country to conduct a
review of research on the harmful effect the insecticide have on different
groups. If the review shows any people are being exposed to a harmful level of
chlorpyrifos, the EPA must either suspend or revoke the registration, within
three months.
About CCM
CCM
is the leading market intelligence provider for China’s agriculture, chemicals,
food & ingredients and life science markets.
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