Overview of Chinese Pesticide Market in 2015

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Overview of Chinese Pesticide Market in 2015A double digit decrease in exportation figures and a muted performance from China’s domestic market have reduced the profits of Chinese agrochemical producers;
The full chain agronomic services offered by multinationals and domestic distributors have forced the traditional middleman out of the supply chain equation;
Rising costs of compliance with China’s EHS regulations has transmitted to the agrochemical industry;
Domestic products saw reduced or flat prices while imported products achieved 10 to 20 percentage growth;

In 2015, China produced 1.33 million tons of pesticide active ingredients, down from 1.49 tons in 2014. Exportation fell by more than 10% in both volume and value terms. Influenced by complex factors including weather, regulatory policies and changing distribution channels, the domestic usage was slightly lower than expectation at 0.3 million tons, causing Chinese producers to feel the pinch of higher fuel and labor costs.

Production and International Trade

The largest percentage reduction occurred in herbicide and insecticide categories, decreasing the total production by about 11.7% compared to 2014, representing a 4-year low.
Table1- Chinese Pesticide Production in 2015 (a.i., 000 tons)

Category

2015

2014

2013

2012

Insecticide

303

352

317

475

Fungicide

169

170

155

120

Herbicide

827

919

940

874

Others

29

54

48

3.6

Total

1328

1495

146

150.5

 
Totally 1012 Chinese companies have exported and imported 7.96 billion USD amounting to some 1.56 million tons (physical quantity) of pesticides last years. In volume terms, the top three exporting provinces were Jiangsu, Zhejiang and Shandong and the three most exported pesticides remained glyphosate, paraquat and imidacloprid.(China Pesticide Exportation in 2015 Decreased Firstly in Last 5 Year
Table2-Value and Volume of China Pesticide Exportation and Importation in 2015(physical quantity)

 ExportationImportation
 Value
(billion USD)
Volume
(000 tons)
Value
(million USD)
Volume
(000 tons)
Year20152014201520142015201420152014
Technical4.265.028545.6616.8120916.95.3
Formulation3.0223.732963.81024.955865350.761.9
Herbicide3.9564.94610341089.715617819.320.7
Insecticide2.0252.575309.4383.820719514.914.1
Fungicide1.1511.098145.1148.729435622.925.6
Plant Growth Regulator0.1450.1382018.721140. 40. 2
Rodenticide0.0040.0040.80.8010.10. 2
Total7.2828.761509.41641.767.874.557.667.2

Converting the physical quantity of formulation into the a.i. volume by coefficient of 0.3 it can be deduced that only 37% of the production was for the domestic market, which was affected by weather, pest outbreaks and many other factors.

Domestic Market

The domestic markets remained oversupplied. Treated area was reduced because pest outbreaks were lower than 2014 and the usage was further reduced by the zero-growth plan (environmental health and safety policy) for pesticide and chemical fertilizer usage.
According to the statistic from NATESC (China National Agricultural Technology Extension and Service Center), the total infested area measured 407.28 billion hectares and the total treated area was 563.00 billion hectares, slightly down by 1.38% and 1.08% respectively.
Table 3-Pest categories, infested and Treated Area in 2015

PestArea Infested
(hectare)
Change (%)Area Treated
(hectare)
Change (%)
Insects and Disease344.64-2.43438.21-2.43
Weeds96.64-3.34103.27-3.36
Rodents24.75+0.3617.63-0.43
Total470.28-1.38563.00-1.08

 
The percentage of organophosphorus insecticides in the insecticide category was 65%, a reduction of 11.2% from 2014. The supply vacuum was immediately filled by diamides and neonicotinoids. Single compound fungicides were replaced by mixtures and seed treatments of multiple compound fungicides and combinations of insecticide and fungicide. Plant Growth Regulators were increasingly used due to their utility in crop resistance, quality and output. Rodent problems were more severe than 2014 but rodenticide use was lower, majorly due to reduced funding by local governments, which also increased the percentage of imported rodenticides. It is remarkable in some regions that weeds resistance has markedly increased with elevated herbicide usage.

Table 4-Categorized Usage in 2015

Product Category2015 Usage(ton)Percentage (%)2014 Usage(ton)Change (%)
Insecticide108 884.6936.30118 245.54-7.92
Fungicide79 998.9226.6779 940.62+0.07
Herbicide107 206.2535.74102 336.624.76
Plant Growth Regulator3 845.171.283 794.96+1.32
Rodenticide47.890.0265.87-27.30
Total299 982.93/304 383.601.45

 
The uses of each product differ based on the regional economy, level of development, crop plantations, characteristics of product categories, host crop, active ingredient. Major consumption patterns are summarized:

Table5- Product Highlights in 2015

Product Category
 (including Bio pesticide)
Feature
InsecticideTop 12 host cropsrice, wheat, corn, soybean, potato, cotton, rape seed, citrus, apple, tea, vegetable,
Top 10 used a.i.phoxim, chlorpyrifos, abamectin, emamectinbenzoate, lambda-cyhalothrin, imidacloprid, isoprocarb, beta-cypermethrin, diazinon, bacillusthuringiensis
Top grown neonicotinoids and diamides:thiamethoxam, clothianidin, dinotefuran, paichongding, imidacloprid, acetamiprid, imidaclothiz, nitenpyram, chlorantraniliprole, flubendiamide
Top 10 consumption provinces
(descending order)
Hunan, Hebei, Guangdong, Sichuan, Guangxi, Shandong, Hubei, Yunnan, Anhui, Zhejiang
Usage ranging from 1000 tons to 30,000 tons
(a.i., descending order)
dichlorvos, chlorpyrifos, phoxim, trichlorfon, bisultap, omethoate, acephate, monosultap, imidacloprid, dimethoate, triazophos, buprofezin, pymetrozine, isocarbophos, malathion, propargite, bacillusthuringiensis(BT)
FungicideTop 10 consumption provinces
(descending order)
Shandong, Yunnan, Jiangsu, Hebei, Anhui, Guangdong, Liaoning, Sichuan, Hebei, Shaanxi;
Usage over 1500 tons(descending order)coppersulfate, carbendazim, EBDCs, thiophanate-methyl, tricyclazole, chlorothalonil, jingangmycin, triadimefon, isoprothiolane, copperhydroxide, dithiocarbamates, metalaxy
A.I.(+ 30%)thifluzamide, hexaconazole, kresoxim-methyl, thiabendazole, fludioxonil, difenoconazole, amicarthiazol, pyraclostrobin, prochloraz;
A.I.(- 30%)Spinetoram, coumoxystrobin, vinclozolin, trifloxystrobin, phenazino-1-carboxylicacid, albendazole, tolclofos-methyl
HerbicideProvinces with increased usageHebei, Beijing, Hubei, Hebei, Sichuan, Xinjiang, Jiangsu, Shaanxi, Hunan, Fujian, Gansu, Guangdong, Yunnan, Guizhou, Chongqing, Liaoning, Shanxi, Anhui, Qinghai, Inner Mongolia;
Provinces with usage ranging from 5,000 to 20,000 tons
(descending order):
Heilongjiang, Jilin, Hubei, Liaoning, Yunnan, Shandong, Guangxi, Sichuan, Hunan;
Usage ranging from 10,000 tons to 30,000 tons
(a.i., descending order)
glyphosate, acetochlor, atrazine;
Usage ranging from 1000 tons to 10,000 tons
(a.i., descending order)
paraquat, butachlor, 2,4-D butylate , bentazone, metolachlor, MCPA, quinclorac, trifluralin;
A.I.(+30%)glufosinate-ammonium, topramezone, mefenacet, imazethapyr, benazolin-ethyl, metribuzin, mesotrione, chlorsulfuron, quizalofop-ethyl, simetryn, rimsulfuron;
A.I.(- 30%)chlorimuron-ethyl, Imazethapyr, oxyfluorfen, triallate, fomesafen, penoxsulam, molinate;
PGRMost grown a.i.brassinolide
Most reduced a.i.Mepiquat chloride
Most used a.i.
(physical quantity, descending order):
paclobutrazol, ethephon, brassinolide;
Top 10 consumption provinces
(physical quantity, descending order)
Hainan, Guangdong, Yunnan, Xinjiang, Sichuan, Hubei, Shandong, Hebei, Anhui, Hunan;
Rodenticide
 
Most used a.i.sodium diphacinone, bromadiolone;
Top 10 consumption provinces
(physical quantity, descending order)
Liaoning, Hebei, Heilongjiang, Anhui, Yunnan, Shandong, Hebei, Sichuan, Gansu, Ningxia;
Biopesticideactive ingredients grownSpinetoram, oligosaccharins, brassinolide, spinosad, abamectin-aminomethyl, NPV, bacillusthuringiensis(BT) , gibberellin, kasugamycin, liuyangmycin, bacilluscereus;
active ingredients reducedBacillus subtilis, jingangmycin, abamectin, matrine, polyoxin, phenazino-1-carboxylicacid, azadirachtin, spinetoram;

Policy, Distribution and Prices

The zero-growth plan was fully implemented by the government and included integrated pest management, official recommendation of specific products and governmental procurement. It had a significant effect on market balance. Biopesticide accounted for about 8.22% of the market and 11 biopesticides saw increased usage compared to 2014. Totally 926,400 tons of commercial products were utilized, of which 0.438% are rated slightly toxic, 71.48% are rated as low toxicity, 25.19% are rated as moderately toxic, 3% are rated as highly toxic and only 0.005% are hyper toxic.

The top 5 multinationals built market share through full chain agronomic service and this mode is increasingly being emulated by indigenous distributors, which squeezed the traditional middleman from the supply chain equation. Multinationals are sophisticated at providing agronomic extension, product logistics and higher rebate while the indigenous agronomy providers are often financially supported by the government. Neither of these strategies seems sustainable in the long run as growth in the high premium imported products is untenable in China while the indigenous distributors are undeniably subject to both upstream producers and end users.

Depressed product price, together with the unrelenting rise in the cost of raw materials - largely driven by China’s EHS regulations, is cutting corporate profits. Prices of natural gas, liquid chlorine, caustic soda, methanol, ammonia, phosphorus, sulfuric acid, sulphur and formaldehyde continued to hold up, which inevitably drove up prices of glyphosate, chlorpyrifos, profenophos and other bulk organophosphorus insecticides. Paraquat and abamectin, emamectin benzoate prices soared due to the prohibition of paraquat aqueous solution and recycling of abamectin. Most of the indigenously produced products maintain lower or flat prices while the imported products achieved 10 to 20 percentage growth.(China's Top 100 Pesticide Companies Sales Flat in 2015)
 

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