Jan. 5, 2018
The P.R. of China has become the leading pesticide producer, consumer, and exporter globally in recent years. For many international agrochemicals firms, the country is still regarded as a cheap pesticide technical supplier. These enterprises buy the Chinese products to process the intermediate material into pesticides formulation and sell it in local markets.
However, a lot has changed in the pesticides industry in recent years and during 2017. The middle kingdom is facing a severe overcapacity of pesticides, mostly pesticides technical which show low market value for the domestic manufacturers. In addition, the production technologies are often outdated and inefficient.
Overall, China's pesticide use has dropped in the past three years constantly. The middle kingdom has announced its goal in 2015 to achieve zero growth in pesticides usage by 2020, and, according to official reports, it has already seen negative growth over the last three years. This trend is likely to continue in the future, supported by governmental actions.
Currently, China can produce 500 kinds of pesticide technical, and over 300 kinds have the actual productive capacity, which is usually generic products. Traditional pesticides like glyphosate
and chlorpyrifos usually account for the largest proportion of China's pesticide products. Simple production technologies, mature production processes, stable market demand and sufficient raw material supply, as well as easier registration approval, are major reasons for such a large proportion of traditional pesticides in China. However, most traditional pesticide varieties face overcapacity currently.
Insecticides, Herbicides & Fungicides
China produces over 100 kinds of insecticide active ingredients and over 1,500 types of insecticide formulations. Among all insecticides, the output of organic insecticides ranks the first, accounting for over 95% of the total output. In detail, the output of organophosphorus insecticides, carbamate insecticides and pyrethroid insecticides ranks the top three in China.
In 2017, weeds seriously affected farmlands. Resistant-barnyardgrass problem is dominant in the middle and lower reaches of Yangtze River, northeast rice area and northwest rice area. On the other hand, affected by environmental protection, rising raw material prices, increasing labour cost and transportation cost, the market prices of herbicide technical keep rising.
According to the National Bureau of Statistics of China, domestic manufacturers have produced around 200,000 tonnes of fungicides, accounting for 5.3% of the national total output of pesticides. Most fungicides produced in China are generic products, and the whole Chinese fungicide industry is confronting some problems, like the plight of overcapacity, irrational competition, weak brand recognition and low added value of products.
Trend of Chinese pesticides in 2018
According to market intelligence firm CCM, China’s pesticides market will continue growing in 2018, driven by updated processing technology and market consolidation. Large enterprises will profit the most in 2018 and more pesticides are getting banned. Foreign traders of Chinese pesticides will face good opportunities to bring the products under trusted brand names to international markets and benefit from the growing demand worldwide.
China’s pesticides industry is facing a bunch of challenges that will continue to put pressure on enterprises in 2018. Overall, the recovery of the global economy will still be a major support to domestic supply.
The year 2018 will benefit the Chinese pesticides manufacturers that already have upgraded their production processes and are in possession of a highly integrated supply chain, able to generate their needed raw materials by themselves to avoid high purchase costs.
Hence, leading enterprises in this industry are going to have more power in the market as environmental inspections and safety inspections become a normal routine in the foreseeable future. The main advantages of large pesticides enterprises are the self-sufficiency in raw materials and the resulting independence of market voluntarily, the implementation of new national standards for pesticides to fight fake and counterfeit products, as well as big overseas markets with growing demand and already existing clients.