China's chemical pesticide intermediate output during the first three quarters of 2022 declines YoY 01-08-2023

The National Bureau of Statistics of China recently announced that the cumulative output of pesticide intermediates in China from January to September of 2022 was 1,917,400 tonnes, a decrease of 1.9% YoY.  The top three provinces responsible for producing pesticide intermediates in China during these first three quarters were Jiangsu, Shandong and Sichuan, with an output of 422,500 tonnes, 232,500 tonnes and 228,900 tonnes from January to September of 2022, a YoY increase of 5.8%, 18.6%, and 0.3% YoY, respectively.

Among the top three provinces in terms of output, Jiangsu and Shandong saw a relatively large increase in output during September, with a YoY increase of 25.7% and 59.8%, respectively.  This increase in production may be due to many enterprises starting business again after a temporary shutdown. However, affected by a glyphosate safety incident, Sichuan’s output of pesticide intermediates declined 12.1% YoY. In addition, Inner Mongolia, Liaoning, Jilin and other provinces gradually reached production capacity, and due to newly built glufosinate-ammonium, glyphosate, and clethodim plants, the output in these provinces may continue to climb.

Pesticide industry growing in China despite pandemic setbacks

In 2021, the production and sales of the pesticide industry in China was prosperous, with a substantial growth in operating income and profits YoY. In 2021, with rising prices of pesticide intermediates and a surge in demand in overseas markets, seven hundred and two Chinese pesticide enterprises reached the large-scale level, defined as a company with a product sales revenue of over RMB 20 million, an increase of 1.3% YoY.

According to the National Bureau of Statistics of China, the total pesticide output in China reached a peak of nearly 3.8 million tons in 2016. In 2015, with the implementation of the Ministry of Agriculture's policy of "achieving zero growth in the use of chemical fertilizers and pesticides by 2020", many highly toxic pesticide varieties have been phased out, and other chemical products with high-efficiency and low-toxicity have gained traction in the Chinese pesticide market. This trend toward pesticides of lower volume and toxicity has caused the total output of pesticides in China to decline steadily.

China’s global pesticide trade expected to increase in 2023

The supply and demand for pesticides in China have been mostly stable throughout the past few years, which will provide a stable environment in which pesticide production companies can grow. Furthermore, China will continue to strive not to increase its use of pesticides domestically, so export trade is expected to be a major outlet for the development of China’s pesticide industry, and in 2021, the output of China's pesticide intermediates was 2.498 million tons, a YoY increase of 16.29%. Furthermore, Huaan Securities recently predicted that in 2023, the pesticide industry is expected to achieve a rebalancing of supply and demand, which will cause pesticide companies to flourish again. Huaan Securities opined that key factors in the success in the pesticide industry are cost control and production capacity, which will give large-scale companies in China a competitive advantage in the global market.

For more information, please check our resources on China’s pesticide market.

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