Apr. 29, 2015
According to recent grower level data collected by Kleffmann in China and information collated by its Global Crop Protection and Seed reference database amis®AgriGlobe®, Kleffmann group estimates that the Chinese crop protection market was $6.08 billion in terms of value at ex-manufacturer level in Harvest Year (HY) 2014.
Based on results of the distributor surveys (amis®Trend), which revealed that the mark-up up between ex-manufacturer and end user can often be in excess of 50%,the overall market value at farmer level is likely to be close to $12 billion. To that value can be added a multitude of additives, surfactants and non-crop pesticides such that the overall market is likely to exceed $12 billion by some margin.
The key drivers of the roughly 9% year on year growth as compared to Harvest Year 2013 have been varied in nature. China’s crop areas increased slightly in HY 2014 and this combined with improvements in yields & positive prices allowed farmers to reinvest financial resources. At the same time, Chinese ongoing land consolidation policy is showing its first impacts; input efficiency is coming into focus, and this in-turn can be expected to have a long term effect on farmers’ input-use behaviour.
In terms of pesticide use the overall volumes have broadly remained stable, whereas prices have slightly increased. This finding from the amis® farmer based research hints towards a shift in farmer behaviour towards higher priced products, implying that farmers have emphasized quality/value over cost alone. Compared to more developed markets there is still some way to go; but the trends are pointing in the right direction.
As far as the market split by crop is concerned, close to 35% of the market value in HY 2014 was down to rice, corn and wheat, which roughly accounted for 50% of the overall cultivated area. Segment wise, the lion share of the overall 9% year on year growth as compared to 2013 was in-part driven by higher than 10% growth in the fungicide category, which itself was boosted by the significant increases in the fruit & vegetables area.
The Kleffmann amis® surveys and studies in China revealed, that farmers have struggled with resistance by key pests to existing pest management solutions and often reacted with increasing dosages, especially in the fruit and vegetables sector. Insecticide pests were not as severe as in the previous year and affected the sales of insecticides, slowing growth in the segment. The herbicides segment was rather flat in HY 2014, as prices for key actives took a dive after starting high at the beginning of the year. Volumes however,were not affected.
Analysing the Chinese crop protection market both from the standpoint of amis®AgriGlobe®, which benefits from a multitude of sources including distributor studies (amis®Trend), expert interviews and national association data, as well as the amis® farmer panels gives us a unique and unrivalled understanding on the overall market situation.
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