Present status of Chinese agriculture & agrochemical enterprises

China’s per capita cultivated land is 1.3 Mu, while it is nearly 4.2 Mu globally. The country's per capita fresh water resources amount to about 2,200 cubic meters, while the global volume is 7,342 cubic meters. The world’s total crude oil output was 3.9 billion tons in 2016, while China consumed 560 million tons, having imported 380 million tons. Once an exporter of oil, China has now become an oil importer. Integrated statistics have revealed severe shortages of resources in the country.

 

On crop imports, in 2016, China imported some 84 million tons of soybeans, 22 million tons of food grain (rice and wheat), and 10.45 million tons of oil. The country also imported meat, dairy, cotton and sugar for consumption. Thus, the total volume of imported crops reached 123.83 million tons. Based on a crop to land conversion calculation, the production of such a huge amount of crops would require 800 million Mu of cultivated land. As a result, China’s food production has become a structural issue rather than simply a shortage of resources. At present, it appears there are no problems with either rice or wheat. Further, there will be no problems with corn after GM corn is launched in the coming years, as it will lead to a significant increase in output. The global staple crop market is expected to see a downward trend in prices. Moreover, China’s crop planting costs are far higher than those of the United States and Canada. This lower production efficiency will reduce the competitiveness of Chinese food grain in the world market.

2015 Global Crop Protection Market
Company	Sales($ billion)	Market Share(%)
BCS+Monsanto	14.1	25.0
Syngenta	14.0	24.8
Dow+Dupont	8.0	14.1
BASF	6.6	11.7
Total of the Top 6	42.7	75.5
Total	56.5	100
Average of the Top 6	71	-

2015 Chinese Crop Protection Market:13% of Global Market, No.3 Globally
Number of Company	Total Sales($ 100 million)	Average Sales
2,200	500	0.23

With respect to production, there are many “zombie companies” among the 2,200 pesticide enterprises. The total industry capacity is 3.7 million tons, while demand would not exceed 1 million tons if the manufactured product was of high quality. As such, a quarter of the existing capacity would be sufficient to fulfil the demand of the domestic market.

 

On product registrations, there are currently more than 34,000 pesticides registered, of which one-third are outdated compounds that are no longer in use and there are numerous duplicates on the list.

 

The patent for BASF's pyraclostrobin expired in mid-2015. The market value of the product in China is about 500 million yuan, whereas the products of BASF have taken a market share worth 300 million yuan. The remaining 200-million-yuan market is shared by roughly 1,500 product registrations---453 single agent products and 950 mixtures---by 396 manufacturers. 

 

 

The heyday of the agrochemical industry is over, but demand is still strong. The most important reason for this is that agriculture is the foundation of the Chinese national economy and has great political significance. The availability of cultivated land is decreasing and resources are running short while demand is growing, so technology is the only feasible solution.

 

The upgrading and transformation of Chinese agrochemical enterprises across three aspects:

Changes predicted for the Chinese agrochemical industry in the next 5--10 years: In 2015, China had 2,200 manufacturers with total sales of 50 billion yuan and a 90-billion-yuan retail market comprising terminal market retailers and distributors. In the future, sales will continue to grow, while the number of manufacturers will drop by 500 and some distributors will leave the market.


To help you better understand the needs of the market and explore the available business opportunities in China, AgroPages will organize a China field visit for enterprises interested in the Chinese agrochemical market from 12th Sept. to 15th Sept.



Know more：China Field Visit to Explore the Opportunity of Chinese Agchem Market