Economic downturn, pesticide market submits year-end "transcript"

Time:

2016-02-18


At the end of 2015, various year-end data of China's pesticide market were released one after another. At various forums and conferences held in the industry recently, the topic of reviewing the pesticide market in 2015 and looking forward to the pesticide market in 2016 has become the focus of everyone's attention.

Some analysts believe that the overall pesticide market in China showed a "small year" characteristic in, with multiple factors such as a sluggish economic situation, increased environmental pressure, weak market demand, and the prohibition and restriction of the use of highly toxic pesticides causing most pesticide product prices to remain low, which to some extent has an impact on the industry's income level. With the growth of population, the four major grain crops of wheat, rice, corn, and potatoes still maintain a "tight balance" between supply and demand, and the rigid demand for agricultural and chemical products will not change. It is expected that the pesticide market will continue to maintain a stable trend in 2016.

2015 Pesticide Market Keywords

Xiao Nian

Slow down

Meager profit

Prevention and control of 8 billion mu of land, recovery of 104 million tons of grain loss

Due to the abnormal climate in 2015, with early drought and little rain, and later continuous overcast rain, there were significant differences in the seedling conditions of autumn crops, especially dry grain crops, which made it difficult to manage crops and created conditions for the occurrence of diseases and pests. Especially affected by the El Ni ñ o phenomenon, major diseases and pests such as wheat stripe rust, scab, rice blast, rice planthopper, potato late blight, and third-generation armyworm have shown a resurgence trend this year. According to statistics from the National Agricultural Technology Center's Standard Information Office, in 2015, China had 6.697 billion mu of pests, weeds, and rodents, 8 billion mu of pest control areas, recovered 104 million tons of grain losses, 1.1607 million tons of cotton losses, 3.4685 million tons of oil losses, 17.6628 million tons of fruit tree losses, and 50.5262 million tons of vegetable losses.

The overall market is characterized by a 'small year'

In 2015, China's pesticide industry presented the characteristics of "small years". Specific manifestations: decreased revenue growth, weak demand, and low prices of most products. The pesticide market is generally showing a low operating trend, with stable pesticide prices and oversupply in the pesticide market. As of November 2015, the prices of many bulk pesticide products such as glyphosate and paraquat have been declining. Currently, the price of glyphosate is hovering around 19000 yuan/ton, and paraquat is 42% mother liquor. The actual transaction volume is as low as 14000 yuan/ton, with only a small number of varieties going out of the independent market, such as dichlorvos, chlorothalonil, azoxystrobin, and glyphosate. Against this backdrop, many multinational pesticide companies have not performed as expected, and the growth of the domestic pesticide industry has also fallen short of expectations.

Overall production slightly increased and growth rate slowed down

According to statistics from the National Bureau of Statistics, from January to November 2015, China produced 3.37 million tons of pesticide raw materials, a year-on-year increase of 3.0%. The production of herbicides was 1.608 million tons, a year-on-year decrease of 0.5%. The production of insecticides was 469000 tons, a year-on-year decrease of 3.9%, accounting for 13.9% of the total pesticide production. The production of fungicides was 166000 tons, a year-on-year decrease of 7.9%, accounting for 4.9% of the total agricultural drug production.

Among them, insecticides and fungicides decreased, while herbicides remained basically unchanged. From January to September 2015, 355 enterprises above designated size in China achieved 2.7369 million tons of pesticide raw material production, an increase of 3.2% compared to the same period last year. The supply of pesticides is still sufficient, with high inventory levels and supply exceeding demand. From the perspective of large-scale production, in the first three quarters, the pesticide production of 125 enterprises above designated size in China was 389900 tons, a year-on-year decrease of 2.7%. The fungicide production of 70 enterprises above designated size was 135800 tons, a year-on-year decrease of 6.9%. The herbicide production of 112 enterprises above designated size was 1.3062 million tons, a year-on-year decrease of 0.8%.

Pesticide enterprises enter a period of low profit

In 2015, the establishment and development of multiple agricultural materials e-commerce platforms, as well as the promotion of QR code policies, have driven the industry towards modernization, informatization, diversification, and networking. However, with the increasing pressure on safety and environmental protection, the production costs of upstream enterprises continue to increase, while the transaction prices of products continue to fall. The profit space of the pesticide industry is squeezed. In addition, due to multiple factors such as weak demand in both international and domestic markets, and the prohibition and restriction of the use of high toxic pesticides, the pesticide industry as a whole shows a trend of low price operation. Overall, pesticide companies have entered a period of low profit and breakeven, with some products even experiencing losses.

Double reduction in total import and export volume and amount of pesticides

According to statistics from the International Exchange and Service Department of the Drug Control Institute of the Ministry of Agriculture, from January to November 2015, China exported 1.3815 million tons of pesticides, a year-on-year decrease of 9.2%, with an export amount of 6.67 billion US dollars, a significant decrease of 17.71%. From January to November 2015, China imported a total of 52800 tons of pesticides, with an import amount of 616 million US dollars. The decline reached double digits, with a decrease of 14.09% and 10.15% respectively. Although the overall situation is facing challenges, with the gradual easing of environmental pressure and the gradual decrease in the cost of raw materials for pesticide production, China's pesticide import and export are expected to rise again in 2016 or 2017.

Among them, from January to November 2015, China exported a total of 495400 tons of pesticide raw materials, with an amount of 3.884 billion US dollars, accounting for 35.86% and 58.22% of the total export volume of pesticides, respectively. Exported 886100 tons of preparations, worth 2.787 billion US dollars, accounting for 64.14% and 44.78% respectively. Although the export volume and price have declined, the proportion of formulation exports in pesticide exports has been increasing year by year, becoming the main force of exports, while the proportion of raw drug exports has been decreasing year by year. In terms of imports, the import of raw materials has emerged, with both quantity and price increasing. From January to November, a total of 6400 tons of raw materials were imported, with an import amount of 113 million US dollars, a year-on-year increase of 38.39% and 33.40%, respectively. The import of preparations also experienced the first double decline in volume and price in nearly 5 years. From January to November 2015, the import volume decreased by 18.36% to 46400 tons, and the amount decreased by 1633 to 503 million US dollars.

2016 Pesticide Market Keywords

Market stabilization

Demand reduction in advance

6.18% reduction in total national pesticide demand

According to the preliminary prediction and statistical analysis of 31 provincial-level plant protection stations in China, the total demand for pesticides (commodity volume) in 2016 is expected to be 961700 tons, or 304800 tons per hundred, a decrease of 6.18% compared to the previous year. The varieties with a demand of over 10000 tons are (in descending order): glyphosate, dichlorvos, copper sulfate, acetochlor, atrazine, carbendazim, chlorpyrifos, and daisens.

The total amount of pesticides has decreased and the structure has been significantly adjusted

According to the National Agricultural Technology Center Standards Information Office, it is estimated that the total demand for insecticides in 2016 will be 103700 tons, a decrease of 5.21% compared to 2015. Organic phosphorus has been decreasing year by year in recent years. In 2016, the demand was 71900 tons, a decrease of 6.29% compared to the previous year. The varieties in high demand are dichlorvos, chlorpyrifos, trichlorfon, phoxim, acephate, omethoate, dimethoate, and triazophos.

The expected demand for carbamates is 4600 tons, a decrease of 10.97% compared to 2015. The varieties with high demand are isoprocarb and carbofuran, while the varieties with a significant increase are indocarb; The varieties with a significant decrease are carbaryl and carbofuran.

The expected demand for pyrethroids is 3800 tons, an increase of 8.4% compared to 2015. The varieties in high demand are cypermethrin, fenvalerate, and fenvalerate, while the varieties with a significant increase are bifenthrin and fenvalerate (S-fenvalerate, cis fenvalerate).

The estimated demand for other types of insecticides is 23300 tons, a decrease of 2.45% compared to 2015. The varieties with a high demand are Xiaoshuang, Xiaoshudan, thiazidone, imidacloprid, pyrazidone, and Bacillus thuringiensis (BT).

Decreased demand for acaricides, fungicides, herbicides, and plant growth regulators

The demand for acaricides has decreased. The estimated demand is 10300 tons, a decrease of 5.22% compared to 2015. The varieties in high demand are crystal sulfur mixture, acetylene mite, and pyridaben.

The demand for fungicides has decreased. The expected demand is 82700 tons, a decrease of 9.25% compared to 2015. The varieties with high demand are copper sulfate, carbendazim, daisens, methylthiophanate, tricyclazole, chlorothalonil, triadimefon, jinggangmycin, rice blast, copper hydroxide, etc. The varieties with high demand growth rate are syringin ester, ether ester, imidazol alcohol, pyronitrile, azoxystrobin, prochloraz, hexazole alcohol, pyrazole ether ester, and Bacillus subtilis.

The demand for herbicides has decreased. The expected demand is 104700 tons, a decrease of 4.22% compared to 2015. This is the first time in recent years that the demand for herbicides has decreased. The varieties with high demand include glyphosate, acetochlor, atrazine, butachlor, paraquat, 2,4-D butyl ester, methamphetamine, and metolachlor; The varieties with a significant increase in demand are benzothiazide, isoxachlor, imidazolium nicotinic acid, nitrosulfuron, pyrfluclofop-p-ethyl, ethynoxalic acid (Maiji), chlorpyrifos, propachlor, zinazone, Xicaojin, cyanflufop-ethyl, quinoxalin, and chlorofluoropyranoxyacetic acid.

The demand for plant growth regulators has decreased. The expected demand is 3234.21 tons, a decrease of 18.88% compared to 2015. The varieties in high demand are ethephon, paclobutrazol, and chloramphenicol.

Seed treatment agents play a new growth point

In recent years, the seed processing agent industry, which has the main advantages of "multiple effects with one drug, labor and time saving, twice the result with half the effort, concealed application, and environmental safety", has flourished. Many pesticide companies at home and abroad have been enthusiastic and have rushed in, increasing their research and development promotion efforts. At present, seed treatment agents have become a hot topic for enterprises to apply for registration and a new growth point in the industry. There is still huge market space in the seed treatment agent market, and the number of registered seed coating agent products will continue to increase in the next two to three years.

Efficient plant protection equipment ushers in a spring of development

With the continuous transfer of rural labor force and the increasingly prominent hollowing out of rural areas, new plant protection machinery will replace outdated small medical equipment. The number of electric spray and self-propelled spray bar spray has increased. Meanwhile, with the deepening of land transfer and the vigorous development of new family farms and large planters, the demand for efficient plant protection equipment will continue to increase.

The market is the "barometer", and pesticide enterprises must keep up with market changes, break out of the trap of low content, low cost, and homogeneous vicious competition, vigorously develop and produce green, environmentally friendly, and high content pesticide products, and continuously meet new changes and demands in the market.