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China Pesticide Industry Watch 2021

Editor’s note: Year 2021 witnessed the second year of COVID-19 raging worldwide, and the global economic change entered an accelerated period. It was also a year full of ups and downs for China’s agrochemical industry. 

This year, the Chinese central government made up its mind to implement the “energy intensity and energy consumption control” (“dual control” for short) policy and fulfill its carbon emission commitments as a major country. The development of China’s chemical industry reached a turning point. Despite the confusion and bewilderment, China’s pesticide industry overcame many difficulties and took on the responsibility as a “Manufacturing Giant” of global pesticide.

At such a critical juncture, there might be more adaptive changes in the sourcing advice and guidance regarding international sourcing in response to the dynamics of market conditions. Therefore, AgroPages assists you, with a watchful eye and from a local perspective, in knowing the general situation of China’s agrochemical development in that year from several aspects that are most concerned by the outside world, such as policy developments, production, exports and prices.


The industry faced profound changes due to the implementation of the “dual control” policy

Looking back at China’s chemical industry policy and social environment since 2015, it is clear the Chinese government has been tightening its policies on the development of this highly polluting, energy-intensive and carbon-emitting industry. Environmental regulation, relocation of chemical parks, the explosion in the Jiangsu chemical park in 2019, and the outbreak of COVID-19 at the end of that year jointly disrupted the domestic production, resulting in price fluctuations for a variety of bulk products and impacts on the global pesticide market.

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In 2021, after experiencing several years of policy fluctuations, China’s agrochemical industry eventually met the issuance of the top-level “dual control” policy. According to the promise of the Chinese government, China, the world’s largest developing country, will achieve the world’s highest reduction in carbon dioxide emissions and complete the entire process from carbon peaking to carbon neutrality in the shortest time in the history of the world. This will be an extensive, profound systemic change economically and socially, implying profound changes in the mode China produces in all sectors and in the way people live in the future.


In fact, the contents of the high-level talks between the Chinese President and the leaders of the EU and other relevant countries in September 2020 have unveiled the Chinese government’s determination to control carbon emissions, which will become a persistent policy in the next decade, two decades and forever. China’s proposal of the goal of carbon peaking and carbon neutrality is based on the consideration of the responsibility of a major country and for the benefit of a community with a shared future for mankind. It is consistent with the central government’s envision of achieving the goal of socialist modernization and high-quality, sustainable development and is in line with the general trend of the times.

 

Since 2021, related detailed policies have been made and issued for various industries to achieve the goal of carbon peaking and carbon neutrality as scheduled. In May, China’s Ministry of Ecology and Environment issued the guiding opinions on the construction of energy-intensive and high-emission projects calling for resolutely curbing the haphazard development of such projects and accelerating the promotion of green low-carbon development.  


The guiding opinions set out strict regulations on establishing parks for new and expanded petrochemical, chemical and coking projects, pollutant reduction schemes, requiring that projects must be established in industrial parks that have been planned and passed the environmental assessment. Besides, pollutant reduction schemes shall be formulated for the project-related areas, reserving sufficient environmental capacity. The guiding opinions also require that, for projects in national critical areas for air pollution prevention and control, coal consumption reduction and substitution shall be adopted according to regulations, and high-polluting fuels as substitution measures for coal reduction is prohibited.


Since then, energy-intensive and high-emission projects have become the focus of some provinces to curb. After the issuance of the guiding opinions, the examination and approval of energy-intensive and high-emission chemical projects in Shandong Province was obviously tightened. The local government required that for new projects it must implement the substitution of production capacity, coal consumption reduction, energy consumption and total pollutant emission. Liaoning Province proposed strictly controlling the access of energy-intensive and high-emission projects from seven aspects, examination and approval behavior, investment access, energy conservation review, “dual control” management, environmental impact assessment, safety review, and supervision during and after the process.


Moreover, the northwest provinces where many chemical production projects in coastal areas relocate have put forward stricter policy requirements. For example, Shaanxi, Inner Mongolia and other major energy and chemical provinces have upgraded the criteria for chemical project approval. From 2021, Inner Mongolia Autonomous Region stopped approving new production capacity projects for coke (semi coke), calcium carbide, polyvinyl chloride (PVC), synthetic ammonia (urea), methanol, ethylene glycol, caustic soda, soda ash, ammonium phosphate, yellow phosphorus, polysilicon and monocrystalline silicon without downstream conversion, etc., It guides the orderly exit of restricted production capacity (equipment) in industries with overcapacity, to implement capacity replacement and upgrading. Ningxia introduces a strict environmental access policy for construction projects, including chemical raw material, pesticide and dyestuff industries, and puts forward high-standard construction requirements for newly-built projects, which will be implemented from January 1, 2023.


Driven by overseas demand, domestic production developed rapidly in the year’s first half. In July, the National Development and Reform Commission (NDRC) conducted checks on total volume and intensity and found that many provinces had already used up their energy consumption index for the year. The NDRC promptly put forward early warnings and implemented hierarchical management in response to this situation. Since September, many regions across the country implemented the power cut policy. In October, high-energy consumption companies in Zhejiang, Jiangsu and other key areas were ordered to shut down. In the same month, the Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy issued by the Central Committee of the Communist Party of China and the State Council was officially released, which is also the central government’s systematic planning and overall planning for this important work.


Driven by internal and external demand, national pesticide production rises amidst changing policies

Because of the adjustment of industrial policies, pesticide production in China went into a downward spiral after it hit the peak in 2015-16, and came to 2.148 million tons in 2020 due to the additional impact of the COVID-19 pandemic. In 2021, the rising international food prices stimulated the demand for agricultural planting at home and abroad, and the prices of several pesticide technicals hit record highs repeatedly. As a result, the enthusiasm of manufacturers was greatly aroused. From January to December 2021, the cumulative output reached 2.498 million tons, an increase of 7.8% compared to last year (Figures 1).


Figure1. Production output of China's chemical pesticide technicals (100% basis) and year-on-year growth in 2021

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Source: National Bureau of Statistics


Figure2. Production output of China's chemical pesticide technicals (100% basis) from 2015-2021 and year-on-year growth in 2021

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Source: National Bureau of Statistics


Pesticide production in China is mainly distributed in Jiangsu, Shandong, Sichuan and Zhejiang, with a more noticeable trend of production shifting from the coastal areas to the inland area in recent years. Figure 3 shows the pesticide production in several major pesticide producing provinces in China from 2016 to 2020.


Figure3. Pesticide production in several major pesticide producing provinces in China from 2016 to 2020 (000 tons)

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One can see that the output of Jiangsu, the largest pesticide producing province, is declining year by year. In 2020, its annual output was only 582,000 tons, a plunge of more than half compared to 1,205,500 tons in 2016. Jiangsu introduced regulations in 2016 to classify, integrate, upgrade, reduce or shut down existing chemical parks, and prohibit the construction of new chemical parks. After the “3.21” Xiangshui explosion accident in 2019, the intensity of safety and environmental protection remediation of the chemical industry in the whole province reached the strictest level in history, which substantially impacted fine chemical companies, including pesticide companies in Jiangsu. It once caused tension and even disruption of the supply chain. By 2020, only 29 chemical parks and chemical concentration areas were reserved in the province. At present, 50% ~ 60% of chemical companies in Jiangsu settle in these parks, and the remaining ones have to face the choice of relocation, limited reconstruction and expansion or shutdown.


The same situation is also seen in Shandong Province, which started chemical remediation and park qualification in 2017. In 2018, there were 6,094 chemical companies in Shandong, and by June 2020, the number was reduced to 4,580. The annual pesticide output in Shandong dropped from 893,500 in 2016 to less than 200,000 tons in 2019, and increased slightly to 285,300 tons in 2020.


With increased environmental pressure in the Yangtze River Delta, Pearl River Delta and some coastal areas along the Yangtze River, many chemical companies relocated their production capacity. Some of the withdrawn production capacity from these areas began to be released to the central and northwest regions. The pesticide output of Sichuan Province in central China increased from 178,000 tons in 2016 to 276,100 tons. The investment in northwest China was mainly distributed in Shaanxi, Gansu and Ningxia, driving the annual output of Gansu Province from less than 10,000 tons to 36,900 tons. In the northern region, Inner Mongolia Autonomous Region was the main investment destination.


The relocated production capacity and new investments were concentrated mainly in bulk products, such as glufosinate, glyphosate, 2,4-D, pyraclostrobin, clethodim and mesotrione, etc., and fewer investments were made in specialty products. Although the investments and production capacity of the pesticide industry are constantly shifting to Northwest and North China in recent years, there are still some heavy investments in state-of-the-art, high-tech projects in East China and coastal areas. Among the relocated production capacity, the new production capacity for intermediates accounts for a large proportion, followed by technicals, and the least for formulations. This is consistent with the fact that the pollution by chemical production is primarily generated in upstream and reflects that pesticide companies are paying more attention to the overall layout of the industrial chain when making new investments.


China maintains its position in the global pesticide supply, with significant growth in export value 

The haunting COVID-19 in 2020 affected the resumption of production in many countries and made it challenging to release production capacity. At the same time, orders for the supply of various pesticide products flooded in China. After February 2020, China’s pesticide production recovered rapidly, and the industry was in full swing in processing, R&D, and production of varieties of technicals and formulations. Throughout 2020, growth was achieved in production and export in every month except for February. In the year, China’s pesticide exports increased sharply by 550,000 tons to 2,400,000 tons from 1,850,000 tons in 2019, maintaining a high export growth rate.


Since 2021, the pandemic situation outside of China has continued. Despite occasional outbreaks in some cities sporadically, the situation has been well under control and production activities seldom been influenced. At the same time, due to the up-to-down recovery momentum of the global economy after the pandemic outbreak, the international shipping market continued to rebound, showing the characteristics of “strong demand, congested ports and high freight rates”. Because of the strong freight demand combined with the shortage of transportation capacity from time to time, the freight rate in the shipping market continued to hit highs in 2021, especially in the container transportation market and dry bulk transportation market, which imposed considerable pressure on the export cost of pesticide companies.


Since August 2021, to strengthen the export inspection of hazardous chemicals, China Customs significantly increased the frequency of sampling and inspection of exports of hazardous chemicals, which caused some obstacles in the export declaration of pesticide companies and delayed delivery.


Under the influence of various industry and market policies, the international demand continued, and the dependence on China, a big pesticide country, was increasingly unavoidable. In 2021, China’s pesticide exports increased in volume and price, reflecting the intrinsic position of a major global supplier of herbicides, pesticides and fungicides. According to the General Administration of Customs, from January to November 2021, the total export volume of herbicides, pesticides and fungicides reached 1,635,800 tons, an increase of 11.35% year-on-year.


According to the Institute for the Control of Agrochemicals, Ministry of Agriculture - ICAMA (note: different data source from the General Administration of Customs), since 2015, the proportion of China’s pesticide exports in total pesticide production, after a slight decline in 2018 and 2019, gradually increased in recent two years, reaching 74% in 2020 and 76% in 2021, which indicates that China’s pesticides have played a responsible role amidst the pandemic.


Figure 4. China's pesticide export volume (100% basis) and its proportion in total production from 2015-2021 (1-8)

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Source: ICAMA


From January to October 2021, China’s total pesticide exports reached 1,114,000 tons, a growth of 7% year-on-year, but the value increased by 85%, which means that the value of pesticides soared in 2021. The average growth rate was mainly driven by herbicides, with other varieties having a relatively plain performance. In addition, the price increase of bulk products represented by glyphosate greatly impacted the overall pesticide prices.


Figure5. China's pesticide export volume (100% basis) and growth rate in 2021 (1-10)

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Source: ICAMA


Figure6. China's pesticide export value and growth rate in 2021(1-10)

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Source: ICAMA


In addition to the overall export trend, AgroPages also used the five-year CAGA (compound annual growth average) to analyze the fastest-growing pesticide varieties in overseas markets in recent years.  The analysis revealed that from 2015 to 2019, herbicides remained the variety with the highest growth in exports of technicals. The primary market for flumioxazin is Brazil, where it is used on soybean, mainly for controlling resistant weeds and applied in large quantities in combination with glyphosate and other non-selective pesticides. The development potential of Brazil’s agricultural market and the growing resistance problem may be a major factor contributing to the export of flumioxazin. The exports of imazamox formulation also have a high five-year CAGR. The registration for imazamox technical in China was granted to a domestic company in 2014 and now, the product’s global market is expanding. After being registered in Europe, imazamox-based herbicides are authorized for use with Syngenta’s Clearfield and Clearfield Plus sunflowers in Europe, and the market is promising.


Prothioconazole, one of the global top ten fungicides, began to release its energy in the domestic market as its patents expired in the EU successively. Prothioconazole projects and registration certificates of domestic companies were approved one after another since 2016. Exports of prothioconazole technical began to gain momentum in 2017, with a five-year CAGR of 832%, ranking first in the list of technicals exports. Prothioconazole is expected to be favored by the market in the coming years.


Table1. Top 10 export pesticide products by five year CAGR

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Source: AgroPages


As for the trend of China's pesticide exports, it is expected that it will keep increasing in the short term, considering the complex situation of the pandemic situation in other pesticide producing countries such as India. In addition, the registration of export-only pesticides will become a new driving force for pesticide export growth. The approval of EX-registration for 119 export-only pesticides in 2021 (including 14 registrations for the active ingredient of technicals) is bound to accelerate the pace of China’s exports. For formulation products authorized with the EX-registration, those based on glufosinate-ammonium and glyphosate have the most registrations and approvals, followed by fipronil, fenoxaprop-P and chlorimuron-ethyl.


Table2. Newly authorized export-only registration of technicals in 2021

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Table3. Top 10 registered ingredients of newly authorized export-only of formulations in 20211

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As for the need and export destination, with the signing of RCEP agreement as well as the formation of the China-Japan-Korea Free Trade Area in the future, Southeast Asia and Northeast Asia will become hot spots for pesticide exports; With the mutual recognition of pesticide registration information in countries along the Belt and Road, Argentina, Egypt, Iran, Pakistan and other countries with agriculture taking a large part of their economy will also become regions contributing to the pesticide export growth.


The prices of some technicals raised sharply, price differentiation became prominent

In 2021, the price of pesticides in China increased obviously. According to ICAMA, the export value from January to October rose by 85% year-on-year. Overall, herbicide technicals had the highest rise rate and the largest number of varieties with price rise, followed by fungicides, and insecticides had a moderate price increase. From the point of view of time, the price of pesticides in the first three quarters mainly increased structurally, led by amino acids (glyphosate and glufosinate-ammonium) and amides (acetochlor, pretilachlor and S-metolachlor, etc.).


In September, the NDRC issued the Plan for Improving the Energy Intensity and Energy Consumption Control System. Throughout the fourth quarter, pesticide production was affected by the uncertainty of energy intensity policies and energy consumption control. With the vigorous implementation of the “dual-control” policy in all provinces and municipalities and the subsequent power cuts and production restrictions, the cost of fundamental raw materials rose sharply, mainly involving bromine, yellow phosphorus, coal, caustic soda, natural gas, liquid chlorine, etc., resulting in the disruption of the supply chain of the associated downstream intermediates, such as chloroacetic acid, ethanethiol, ethyl acetoacetate and bipyridyl, and furthermore, leading to production stoppages and panic in the community. The pesticide market started a general rise and experienced the craziest price increase in a decade. Most of the pesticide manufacturers could not secure the supply of upstream raw materials in time. Therefore, they could not assess the impact of the subsequent “dual-control” policy. “No offer, no order” became one of the most popular keywords in the agrochemical industry in the second half of 2021. Afterwards, many factories were basically in a no-offer state, causing chaos in the market.


Although there was an increase in foreign exports at the end of 2021 and the beginning of 2022, the domestic sales and storage in winter for the coming season were delayed. Because manufacturers and sellers were cautious and had a conservative willingness to purchase the materials before the Spring Festival, the price of raw materials dropped, followed by technicals. The price of raw materials and intermediates could drop due to some production limiting factors, such as the air control in early 2022 and high air quality requirements before the Winter Olympics in February.


Table4. China's pesticide prices changes in 2021

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Source: Zhongnong Zongheng

Note: Figure 9 shows the data as of December 31, 2021

  • Glyphosate – leading the growth rate over the year and tending to keep a rising trend

From below RMB28,000/t at the beginning of the year to over RMB80,000/t in December, the herbicide glyphosate led the rise of all products over 2021, and the average price has increased by nearly 200% in China.


Figure 7. Glyphosate prices index in 2021

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Source: Choice Data – Eastmoney


On the supply side, glyphosate’s current global production capacity is around 1.1 million tons per year. China has an annual production capacity of about 700,000 tons, and no additional production capacity was added in 2021. Due to factors such as restricted raw material production capacity and increasing demand, the price of glyphosate soared and the supply failed to meet the demand. According to the comprehensive data from various institutions, the maintenance or overhaul in summer and the normalization of environmental protection and safety inspection have limited the production for some time. The annual output in 2021 still increased compared to that in 2020 because of the manufacturers’ high enthusiasm due to the super boom of glyphosate. On the demand side, the international demand for glyphosate has been greatly enhanced since 2020. Countries pay more attention to food security due to the impact of the extreme global weather and COVID-19.


Figure8. Glyphosate production output from 2015-2021

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The strong trend of glyphosate in the first half of 2021 exceeded expectations. Analysis reveals the main reason is the frequent occurrence of “grey rhino” and “black swan” events on the domestic supply side. In August 2020, the catastrophic flood in Leshan, Sichuan caused Fuhua and Hebang to stop production for nearly two months. In January 2021, some plants in Inner Mongolia were shut down. In February, Bayer experienced unstable supply due to the extremely cold weather in America. In April, the national environmental protection inspection groups started their works in many provinces, and many plants in Anhui stopped for maintenance. With the worsening pandemic situation in overseas countries in April and May, Bayer shut down its production sites or lowered the production capacity once again. The unexpected reduction in production on a large scale at home and abroad drove the sharp price rise of glyphosate for a long time. In the first half of 2021, the price of glyphosate technical rose by around RMB20,000/t, accumulatively.


Figure9. Regional distribution of glyphosate production capacity in China

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In the second half of 2021, the production of yellow phosphorus, the primary raw material for glyphosate, was further curbed by policy. Yunnan’s yellow phosphorus production capacity accounts for more than 40% of the country. To achieve the annual energy consumption target, the Yunnan Development and Reform Commission issued a document on September 11, requiring that the average monthly output of yellow phosphorus from September to December shall not exceed 10% of the output in August. That is a 90% cut. This production reduction policy shocked the yellow phosphorus market. In the second week of September, the price of yellow phosphorus in Yunnan jumped from RMB33,000/t to RMB65,000/t, with a weekly increase of 97%. At the end of the year, the supply generally improved as the production capacity of yellow phosphorus companies in Yunnan was partially restored, the production capacity of some companies in Sichuan increased slightly, and some companies in Guizhou of which the plants were under maintenance starting the commissioning. As of the press time, the price of yellow phosphorus has dropped to RMB31,500/t.


Since late October 2021, the output of coal increased, and the coal price dropped significantly, easing the tension in the production of basic petrochemicals and intermediates. The production cost of glyphosate was reduced, accordingly. In combination with the lift of power cuts in some areas and good supply conditions, the price of glyphosate technical dropped slightly. By the end of December 2021, the price was maintained at RMB82,000/t.


Benefiting from the rising glyphosate prices in 2021, the performance of companies such as Hubei Xingfa and Sichuan Hebang rose sharply in 2021.


Table5. Annual performance forecast of some listed glyphosate manufacturers in 2021 

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Source: Public information


In the short and medium term, the boost in international food prices will promote the increase of global grain planting area, and the substitution of some highly toxic pesticides such as paraquat will be further promoted in various countries. In this context, the price of glyphosate is expected to continue to move upwards. In the long term, it is almost impossible to see the price of glyphosate fall below RMB20,000/t.

  • Glufosinate - price being backed up by supply side shrinkage, raw material cost rise 

Glufosinate experienced a bizarre price rise among all pesticides in 2021 with the price in East China market rising from a low of RMB99,500 per ton to RMB370,000 per ton on November 8, 2021.


Since mid/December 2019, the price increased 271.86% in a two-year period, which hit historic highs from time to time. 


Figure10. The price trend of Glufosinate in 2021

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Source:AgroPagse


Stepping into 2022, the export tax rebate policy will become another significant factor in the future pricing of glufosinate. Since January 1, 2022, the 13% tax rebate implemented for its export was cancelled suddenly. This will directly affect the quotation from Chinese enterprises. 


There are two theories about details of the export tax rebate policy change. One is to altogether cancel the tax rebate, similar to glyphosate; the other is to reduce glufosinate’s export tax rebate from 13% to 9% while the glyphosate tax rebate is increased from 0 to 9%. At the time of going to press, the policy had still not been finalized. Glufosinate’s export pricing is now a matter of concern. 


Glufosinate’s price rise is mainly due to the limited production from the supply side and the impact of raw material cost rise. Since the beginning of 2020, productions of BASF and UPL have been affected. BASF's glufosinate technical production capacity has decreased due to business restructuring; UPL (India) came across a decline in supply due to the impact of the pandemic and the explosion at the plant in Jhagadia in February. Chinese manufacturers have been restricted by the pandemic, environmental compliance regulation and energy consumption control, thus running at low load. 


In the meantime, new capacity has not been launched as expected. In addition, in July 2021, the suspension of production at a prime glufosinate manufacturer due to an accident contributed to the its recent short supply. In terms of raw material supply, the prices of phosphorus trichloride and the starting materiall yellow phosphorus have risen sharply since this year, which back up the price of glufosinate. 


Table6. Main manufacturers of glufosinate

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According to the Baiinfo data, the operating rate of the glufosinate industry was 30.81% in June, which then fell rapidly, with the operating rate being only 18.69% and 17.22% in July and August, respectively; the operating rate rose to a high level at 44.99% in October. In October, the glufosinate production line which was suspended due to an accident gradually has resumed.


Figure11. Monthly operating rate of glufosinate industry in past three years

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From the demand standpoint, the global sale of glufosinate rose rapidly from US$272 million in 2008 to US$1.05 billion in 2020, making it the second-largest GMO crop herbicide globally. In 2021, its CAGR reached as high as 11.91%.

 

With the industrialization of more and more glufosinate-resistant products, the paraquat substitutions and the demand for mixing with glyphosate, it is expected that going forward the market space of glufosinate will continue to increase.


An expert from REACH24H dropped a hint about the degree of the reproductive development toxicity of glufosinate resulting from its mechanism of action. It has caught the attention of Europe and the United States. The ban on glufosinate in the European Union (EU) may also be related to this factor, mainly because of the hazard classification of glufosinate of the reproductive toxicity 1B in the EU, which could no longer fulfill EU’s pesticide re-evaluation. Although the life cycle of glufosinate is currently still in its mature stage, L-glufosinate would have a better registration and market prospect over glufosinate in terms in fulfilling the increasingly stringent regulatory requirement of various countries. 


Besides the fact that L-glufosinate use is only half of that of glufosinate, research institutions have discovered that the reproductive developmental toxicity of L-glufosinate is significantly lower than that of glufosinate. These factors all reveal that the development and market release of L-glufosinate is expected to solve the safety problem of glufosinate. This is worth noting for agrochemical companies that wish to make prior business deployment.


  • Chlorothalonil - falling to the lowest price in recent years


The price of chlorothalonil peaked in the first half of 2019 at around RMB54,000/t. Under the influence of multiple factors, its price went into a downward spiral since the second half of 2019. In 2021, the price of chlorothalonil once came to around RMB19,000/t, the historical lowest price in recent years. The price bottomed out by the end of the year and rose to RMB22,500/t at the end of December. The reasons for the decline in the price of chlorothalonil include the impact of the pandemic on international trade, logistics and normal social interaction, reduced demand caused by climate factors, the integration of industries and the release of production capacity. Besides, the negative view caused by its ban in the EU also affected the price of chlorothalonil to some extent.


China has dominated the production of chlorothalonil in recent years and the overseas production capacity has been withdrawn one after another. In 2014, SDS Biotech took a stake in Jiangsu Xinhe, and closed its own 6kt/a chlorothalonil plant two years later. In 2020, Syngenta announced the closure of its 9kt/a chlorothalonil plant in the United States. In terms of production capacity, SULICHEM maintained at 14,000 tons/year and WEUNITE at 3,000 tons/year. Jiangsu Xinhe Agricultural Chemical Co., Ltd., after expansion in 2018, upgraded its production capacity of chlorothalonil to 30,000 tons/year. In 2020, a 10kt/a chlorothalonil plant was put into operation, promoting the company’s total production capacity of chlorothalonil to 40,000 tons/year. Shandong Dacheng Biochemical Co., Ltd., with an existing capacity of 3,000 tons/year, planned to add a capacity of 14,000 tons/year in 2020.


Chlorothalonil has an excellent bactericidal effect. If it is banned only in the EU, there is still room for its global market. There are high requirements on the production environment of chlorothalonil products and the treatment of wastes from production. After the production capacity and process are improved for compliant manufacturers, they will have prominent cost advantage and superior competitiveness.


Breakthrough in commercialization of GM crops will greatly enlarge the market space of domestic non-selective herbicides

Although the market of genetically modified (GM) crops in China has not been fully liberalized at present, the national policy on such crops is on the way gradually. According to the requirements of the 14th Five-Year Plan, China needs to strengthen the protection and utilization of germplasm resources and the construction of seed banks to ensure the security of seed provenances. It is also required to enhance the technical research of improved agricultural varieties and promote the industrial application of biological breeding in an orderly manner.


The Central Government attaches great importance to the development of the seed industry. The Central Committee for Deepening Overall Reform has reviewed and adopted the Action Plan for Seed Industry Revitalization, emphasizing that it is more urgent than ever to ensure the independent control of provenances, and elevating the security of provenances to a strategic level in relation to national security. On November 12, 2021, the Ministry of Agriculture and Rural Affairs (MARA) issued amendments to some provisions of three seed industry regulations, namely, the Measures for the Approval of Key Crop Varieties, the Measures for the Administration of the Production and Business License of Crop Seeds, and the Rules on Naming Agricultural Plant Varieties. On the same day, the MARA issued a notice to amend some provisions of the Measures for the Administration of Safety Assessment of Agricultural Genetically Modified Organisms, to adapt to the new situation of GMO management.


On January 24, 2022, MARA issued the "Guidelines for the Safety Evaluation of Gene Edited Plants for Agricultural Use (Trial)", mainly aimed at gene editing plants that have not introduced foreign genes and applies for safety evaluation according to the possible risks.


MARA’s revision and new issue of the Guideline made a solid step for the implementation of China’s seed industry revitalization plan. Under the newly revised policy, the time frame for GMO application has been greatly shortened and, in the most optimistic scenario, companies can start seed production next year and sell them in the fourth quarter.


Table7. Food crop varieties developed by domestic companies that have obtained GMO safety certificate

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The application of herbicide-tolerant GM crops in China is expected to boost the glyphosate/glufosinate ammonium demand. According to the List of Approved Agricultural GMO Safety Certificates (Production Application) 2019/2020 disclosed by the MARA, 13 production safety certificates for herbicide-resistant GM crops have been granted to companies such as Dabeinong and research institutes. The approved products are glyphosate-tolerant/glufosinate ammonium-tolerant GM seeds, with corn and soybean as the main crops and covering major food producing areas in China. If the seeds mentioned above with resistance are applied widely in China, it could add nearly 150,000 tons of new demand for glyphosate. As the combined products of glufosinate ammonium and glyphosate are mostly mixed in a ratio of 1:5, ammonium glufosinate will have a new demand of 30,000 tons.


At the beginning of 2022, Syngenta launched its latest glyphosate product Kesuda® (41% glyphosate isopropylamine salt AS), and BASF introduced Jing•Baoshida (L-Glufosinate 10% SL). This indicated that multinationals have targeted the potential new market of non-selective herbicides in China and are making more product planning and reserves.

Source: AgroNews, wrote by Ms. Mickey Shan

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