Hebei Lansheng Biotech Co., Ltd.
Beijing Multigrass Formulation Co., Ltd.

China’s Yangtze flooding may affect part of pesticide and phosphate fertilizer supplies from some Yangtze regionsqrcode

Jul. 20, 2020

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Jul. 20, 2020

Floods have hit 27 provinces, autonomous regions and cities in China as of 12:00 hours, July 12, including Jiangxi, Anhui, Hubei and Hunan, affecting 37.89 million people with 141 people having died or disappeared. 

The rainstorm and flood situation in many areas of Southern China have been quite serious, with emergency responses initiated in many places, where production plants have been requested to stay highly alert against flooding. If necessary, production should be shut down, business suspended and people have to be evacuated. 

At the moment, the Yangtze River flooding is turning serious, and in the short term, this may hamper the supply of pesticides manufactured in Jiangsu and phosphate fertilizer from Hubei.

The floods mainly affect the middle and lower reaches of the Yangtze River, including six provinces such as Hubei and Jiangxi. According to the yearbook of each province, the chemical industry proportion in these flood-hit provinces in 2018 was: Jiangsu (14.4%), Zhejiang (9.1%), Hubei (3.6%), Anhui (2.9%), Hunan (2.6%) and Jiangxi (1.9%).

Pesticides and phosphorus chemicals are the main chemicals distributed within 3km along the Yangtze River.

1. In Jiangsu Province, the output of pesticides technical reached 740,000 tons in 2019, accounting for 33% of the total in China. More than 20% are distributed within 3km along the Yangtze River, among which, the output of insecticides, herbicides and fungicides accounted for 47%, 39% and 56% respectively in China.

2. The production of phosphorous chemicals is mainly distributed in Hubei and Sichuan. According to calculations, the proportion of monoammonium phosphate capacity within 1km and 1-3km along the Yangtze River is 16% and 7% respectively; the proportion of diammonium phosphate capacity within 1km and 1-3km along the Yangtze River is 11% and 4%, respectively. It is estimated that the flood situation may lead to the shutdown of some manufacturers along the Yangtze River, leading to restrictions of the production load in the pesticide and phosphorus chemical industry for a short time.

Research institutions believe that the supply and demand in some regions in the middle and lower reaches of the Yangtze River are both weak due to the extreme weather. However, considering the relatively concentrated distribution of pesticides and phosphorus chemicals, the impact of the flood may be more obvious on the supply of some of the varieties. For example, the price of glufosinate has increased by more than 10% in the past month, which might have resulted from the Yitai Technology’s shutdown of production due to the flood situation in Hubei Province, with no date yet for the resumption of production. Yitai Technology is China’s only manufacturer of methyldiethoxyphosphine, which is an intermediate of glufosinate. Besides its own use, part of the product is sold to other manufacturers such as Yonon, Veyong and Ruikai. As a result, the shutdown of production in Yitai Technology is indirectly affecting the production of glufosinate. 

Source: AgroNews

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