AgroPages-China’s agrochemical price surge will last till next May-Agricultural news

Since the second half of 2016, prices of China’s pesticide technicals have continued to rise, having increased 50 percent, in general. At a recent industry conference, an expert analysis reported that the “price surge of technical materials would last till next May”. It is expected that another round of price increases of technical materials will occur in the coming period. The price rise will, however, slow down by next May, after which prices of technical materials will remain stable.

Due to the restrained supply of upstream pyrilamine, nicosulfuron technical vendors are unwilling to sell their product, and the price is quoted mostly at above Yuan250,000 per ton. The price of mesotrione technical had risen to Yuan150,000 per ton at one time, due to the limited supply of the intermediate 1,3-cyclohexanedione, which, however, may come down at a later stage with the gradual resumption of production. The supply of oxyfluorfen technical still remains restrained, which may not be relieved soon.

So far as insecticides are concerned, emamectin benzoate technical series still remains short. Avermectin powder is costing up to Yuan750,000 per ton, 7.14 percent over last week, while sourcing of emamectin benzoate technical remains difficult.

As regards to fungicides, triazole fungicide still remains a focus of attention. Its price rise has slowed, but in general still remains in a situation of short supply and its price remains high as a result of the price increase of intermediate materials.

Pesticide prices dropped this March, mainly for reasons of weak demand, especially because of the existence of large amounts of stocks of formulations, which caused a drop in prices of technical materials during a later period, having dropped as much as 6.78 percent at one time. When environmental compliance regulations became more stringent in June and vendor’s stocks were eliminated, prices of technical materials started to go up. According to information, prices of technical materials have, to date, increased 39 percent, in general.

In view of the overall price rise of the majority of pesticide varieties, in which prices of part of the product varieties have increased 50 percent, some industry leaders think that the prices of technical materials are unreasonably high and suspect that some players might be speculating on prices.

Faced with the short supply of raw materials and cost increases resulting from reduced capacities, along with environmental pressures, fine chemical vendors are expected to regulate their business operations before the pesticide industry. Hence, prices of technical materials will tend to be rational and gradually stabilize.

Hu Yijun, Sino-Agri Group, said that under current market conditions, both upstream and downstream agrochemical enterprises should take the challenge and opportunity to streamline their business relationship with suppliers. “Sourcing of technical materials should not be limited to product purchases, but should cover all-round services, such as fund management, and the actual effect of supply and information services. Purchasing needs to enable the achievement of strategic objectives to realize more cross functions, so as to provide more services,” said Hu Yijun.