Shipment values drifting downward for Japanese agrochemical market

Falling monthly sales values for agricultural chemicals since April are predicted to erase rises in the first half of this pesticide year, which began in October 2008, to result in a total shipment value for the full pesticide year of ¥328.3 bn($3.50 bn), which is ostensibly flat with the previous year. Warning signs are apparent, however, if a price markup of about 5.3% agreed in 2008 for sales through cooperatives were eliminated from the figure, thus showing a net 5% drop for the full fiscal year.

Statistics released by the Japan Crop Protection Association show that monthly shipment values had been climbing by about 10% compared with year-earlier levels until March, but turned the corner to sink 12.9% in April and 13.4% in May. The market reversal was attributed to diminished demand due to the price hikes for cooperative sales channels, and excess inventories at retailers as a result of orders placed in expectation of the higher prices.

Although sales figures for June and July are not yet in, they are forecast to show 20-30% year-one-year plunges on a decrease in farm production brought on by a surfeit of rain nationwide and consequent lack of sunlight.

The spread of rice-blast infection across the country is unlikely to boost shipments from factories. Demand has been sluggish for both insecticides and herbicides, with the muted appearance of ticks causing a substantial fall in shipment value for miticides compared with the preceding year.

   

Agrochemical Deliveries in Oct 08-May 09
Paddy fields	¥ mn	% annual change
Insecticides	9,967	16.8
Fungicides	8,919	-4.9
Insecticides/Fungicides	26,638	-0.6
Herbicides	57,714	5.6
Subtotal	103,238	3.9
Fruit trees	¥ mn	% annual change
Insecticides	19,353	-4.5
Fungicides	17,529	7.6
Insecticides/Fungicides	38	-2.6
Herbicides	8,271	6.2
Subtotal	45,191	1.8
Vegetables/upland farms	¥ mn	% annual change
Insecticides	40,180	2.4
Fungicides	29,029	3.5
Insecticides/Fungicides	890	11.5
Herbicides	17,332	15.4
Subtotal	87,432	5.2
Others unclassified	24,377 7,932	1.8 -0.6
Total	268,169	3.6
Source: Japan Crop protection Association (JCPA)