2015 Annual Review-Summary of Registration of Imported Water Soluble Fertilizer in Chinese Market

According to the provisions of the 2011 Fertilizer Registration Catalogue and Common Name Scope Change issued by the Chinese Ministry of Agriculture, water soluble fertilizer refers to water-dissolved or diluted liquid or solid fertilizer used for fertigation, foliar application, soilless cultivation, seed soaking and root dipping. In a broad sense, water soluble fertilizer qualified for registration in the market includes the following six categories: primary elements water soluble fertilizer; secondary elements water soluble fertilizer; micro elements water soluble fertilizer; amino acid water soluble fertilizer; humic acid water soluble fertilizer and organic water soluble fertilizer.

Overview of Registered Imported Fertilizer

According to data issued by the Chinese Ministry of Agriculture (Table 1), 9,851 fertilizers were registered through 1st December 2015, including 7,229 water soluble fertilizers, accounting for 73.38%, of which 278 are imported water soluble fertilizers, making up 3.8% of total registered water soluble fertilizers. This fact indicates that water soluble fertilizer has become a mainstream fertilizer registration, while the number of imported water soluble fertilizers remains rather small, compared with domestic products.

As far as the category of registration is concerned, more than 1,500 registrations cover micro elements water soluble fertilizer, amino acid water soluble fertilizer, humic acid water soluble fertilizer and primary elements water soluble fertilizer, with there being fewer than 500 registrations of secondary elements water soluble fertilizer and organic water soluble fertilizer. This confirms that most enterprises may have less enthusiasm for secondary elements water soluble fertilizer and organic water soluble fertilizer; or perhaps the primary elements water soluble fertilizer registered by most enterprises have included secondary elements water soluble fertilizer, which is not required to be registered again. As regards organic water soluble fertilizer, no specific registration criteria have been carried out yet in China, and technical barriers to production is quite high, so registration numbers of this category are relatively small.

According to the proportional registrations of overseas products, the proportion of registrations of secondary elements water soluble fertilizer and organic water soluble fertilizer both exceeds 10%, which respectively accounts for 15.1% and 13.2%, while four other categories make up less than 5%, indicating that overseas companies are attaching more importance to secondary elements water soluble fertilizer and organic water soluble fertilizer, which may be attributable to overseas companies’ market positioning of secondary elements water soluble fertilizer as a separate product line.Further, overseas companies are in possession of more advanced technologies for secondary elements water soluble fertilizer, particularly with sulfur elements. For organic water soluble fertilizer, overseas companies, especially in costal countries such as India, Norway, Ireland, Canada and South Africa, which have a seaweed resource advantage, would be inclined towards use of  more seaweed-based organic water soluble fertilizer registrations.

Regarding the number of registered products from overseas companies, the top 3 categories are primary elements water soluble fertilizer, secondary elements water soluble fertilizer and micro elements water soluble fertilizer, which are, respectively, 76, 68 and 46, followed by amino acid water soluble fertilizer, humic acid water soluble fertilizer and organic water soluble fertilizer, being, respectively, 43, 24 and 21. This reveals, compared with organic water soluble fertilizers such as  amino-acid, humic acid and seaweed-based fertilizers, that inorganic chemical water soluble products are the current focus of development of overseas companies operating in the Chinese market.   

Analysis of Registration Companies

An analysis of registrations by overseas companies shows that there were 98 companies that have registered fertilizers in China (some companies registered several product varieties), mainly from Europe, US, Japan and Korea. Apparently, registrations in China by companies from developed countries had a higher influence than companies located in Asia or elsewhere. The top-ranked companies (Figure 1) registered 105 varieties, which account for 38% of total imported fertilizers, demonstrating the high degree of their presence in the Chinese fertilizer market.

Companies that are active in the primary elements water soluble fertilizer sector included Yara International ASA, Royal RBS B.V., TRADECORPORATION INTERNATIONAL, S.A., COMPO Expert GmbH, and Lima Europe N.V. Companies active in the secondary elements water soluble fertilizer sector included Brandt Consolidated, Inc., PPC Adob Sp.z o.o.Sp.K, Royal RBS B.V., Stoller Enterprises, Inc., and Custom Agronomics, Inc. Companies active in the micro elements water soluble fertilizer sector included Stoller Enterprises, Inc., COMPO Expert GmbH, PPC Adob Sp.z o.o.Sp.K, Royal RBS B.V., Brandt Consolidated, Inc. On the other hand, AGRITECNO FERTILIZANTES S.L., MENADIONA, S.L., COMPO Expert GmbH, PPC Adob Sp.z o.o.Sp.K, and  TRADECORPORATION INTERNATIONAL, S.A. were present in humic acid water soluble fertilizer sector, while Royal RBS B.V., Allie’s Wholesale Garden Supplies Ltd., GRO-TECH Intl’ GROUP, Actagro LLC, and HUBAS KOREA LTD were active in the amino acid water soluble fertilizer sector. LABORATOIRES GOEMAR, Acadian Seaplants Limited, BIOATLANTIS LTD, COSMOOIL CO., LTD., and TRADECORPORATION INTERNATIONAL, S.A. were active in organic water soluble fertilizer. The above activities represent their respective business characteristics and the future orientation of development in China.(Table 2)

At present, these companies run their businesses via selected regional agents, through the opening of China branches and establishment of joint ventures. Each of them has different features, but all of them think highly of the Chinese market. Australian RLF marketing director  Gavin Ball told AgroPages that once it is ready, the Chinese government will enact more reasonable laws and rules to manage novel fertilizer import activities and to further regulate the Chinese market. As management  costs of Chinese farms is on the low side, imported fertilizer can ensure better incomes for farmers. Similarly, BHN expressed strong confidence in the Chinese market, having formulated a detailed marketing planning.


Analysis of Registered Product

Concerning primary and secondary elements water soluble fertilizer, raw materials such as dipotassium phosphate, APP, liquid phosphoric acid, potassium nitrate, ammonium bicarbonate, urea sulfate, magnesium sulfate and calcium nitrate can provide primary elements water soluble fertilizer with six elements - N, P, K, Mg, Ca, and S. The majority of primary elements water soluble fertilizer registered by overseas companies already combine the functions of secondary elements water soluble fertilizer, as a result of rational mixing, so the number of registered primary elements water soluble fertilizer is far larger than secondary elements water soluble fertilizer. 

It is worth noting  that inorganic microelements are less expensive than chelated microelements , so Chinese small and medium size enterprises largely use inorganic microelements as raw material for water soluble fertilizer, while overseas companies primarily  choose chelated microelements as raw materials, to avoid the problem of microelements being fixed in soil which cannot be absorbed and utilized by crops. 

As a popular product on the global agricultural market, water soluble fertilizer containing biostimulants are registered in China under the category of organic water soluble fertilizer. There is not yet a national standard in place to regulate organic water soluble fertilizer. Further, a double standard is used for registration of overseas product and domestic product. Overseas seaweed fertilizer can be more easily registered in China. Except for prime companies, such as LEILI, Qingdao Seawin Biotech Group and Bright Moon Seaweed Group, seaweed fertilizers manufactured by most domestic companies are sold only under the names of amino acid or humic acid water soluble fertilizer, which are commercially well-known, and face administrative penalties at any time.

As of the 1st December 2015,  13 overseas companies have registered 21 organic water soluble fertilizers. Except for Japanese companies that used glucose, glycine, fruit/vegetable fermentation liquid and molasses as major raw materials, all other companies used seaweed as raw material, because  rare seaweed, such as Ascophyllum nodosum and Ecklonia maxima, mostly grow in coastal countries of Europe, America, Africa and Asia Pacific. Except for LEILI, Qingdao Seawin Biotech Group and Bright Moon Seaweed Group, other companies rely on imported seaweed, through Chinese Customs are very strict about the import of seaweed. The import quarantine inspection is a lengthy procedure, and seaweed can be placed in detention, and export clearance formalities remain complicated. These issues restrain the conducting of international business by Chinese domestic seaweed fertilizer enterprises.  

Overseas seaweed fertilizer companies are mostly developed enterprises with longer histories, higher technical levels, mature production processes, strict quality controls and well-known brand images. Companies that have promoted and released their seaweed fertilizers in the Chinese market include LABORATOIRES GOEMAR(BM START), Acadian Seaplants (Acadian), BIOATLANTIS (Super 50), VALAGRO (Megafol), Algea (Algea), Kelp Products (Kelpak), Afrikelp (KELPAK), BIOSTADT INDIA (WOKOZIM100), and Clear Currents (GROW-LEAF).

Regarding the  registration of seaweed fertilizer in overseas markets, , technical barriers and environmental compliance requirements for seaweed fertilizer in developed countries are still high, resulting in the REACH issued this year in EU countries, which raised the limit for heavy metal content in fertilizer and requested seaweed fertilizer to be IMO and ORMI accredited. These factors have increased market entry levels and added to the higher production costs of seaweed enterprises. 

Conclusion

Since the 1950’s, when Israel took the lead in using water soluble fertilizer utilizing drip irrigation technology, the world’s water soluble fertilizers have developed in three stages: the first stage being the use of inorganic primary / secondary elements as the basis, added with inorganic or chelated microelements to fulfill the demand for chemical nutrient elements; the second stage being to add plant growth active substances, such as amino acids, plant growth regulators, humic acid, and fulvic acid, as based on the chemical nutrient elements, partly mixed with pesticides; the third stage being to look for comprehensive functions, such as growth stimulation, nutrient absorption improvement, pest prevention and control.
 
Compared with developed countries, Chinese water soluble fertilizer, in general, falls into the second stage of the developed countries, where technical levels still need to be elevated while the industry centralization ratio is on the low side. Nevertheless, the Chinese government has formulated policies in its 13th-Five-Year Plan to provide guidance to the development of water soluble fertilizer. China’s first water soluble fertilizer analytical report, entitled  China’s Novel fertilizer Development Report 2014, has been prepared jointly by experts of the National Development & Reform Commission, the Ministry of Agriculture, Ministry of Science and Technology, Ministry of Environmental Protection and Chinese Academy of Sciences. The report has suggested that the water-fertilizer integration be the orientation of China’s novel fertilizer transformation and development. In early 2015, the Ministry of Agriculture once again put forward China’s agricultural development objectives of “1-control, 2-reductions, 3-basic treatments” (control of agricultural water usage; reduction of the use of pesticide and fertilizer; basic treatment of livestock pollution, mulch film and straw burning), as well as the fertilizer zero-growth program. These objectives brought the issue of fertilizer efficient utilization to a climax. To raise the efficiency of the use of fertilizer, it is imperative to develop water soluble fertilizer and promote the water-fertilizer integration initiative. 

It is a certainty that with the land transfer program proceeding smoothly, the scale of water-fertilizer integration will grow continuously; government supervision of the quality of water soluble fertilizer will become more stringent; manufacturers will continually improve production processes ; and growers will need higher agricultural production efficiencies. Hence, a change will take place in China’s water soluble fertilizer industry, where simple physical mixing will change into advanced production processes; small-scale workshop production will change into large manufacturing; the auxiliary foliar application will change into modern agriculture, as well as the wide-ranging use of water-fertilizer integration-based applications.

This article will be published in the magazine of 2015 Annual Review. If you want to know more themes and details, please click  the following picture:


Focus of this issue:
•    Exclusive interview of leading companies
•    Analysis of Industry Trends
•    Agro-Company Activities in 2015
•    Overview of registered and launched products in 2015
•    Analysis of Global Agricultural Biotech Industry in 2015
•    In Focus
       - Japan Agrochem Firms
       - Biopesticide
       - Biostimulant