2021CPEW successfully held: Seeking common prosperity in upstream and downstream value chain; Seizing opportunities for business upgrading with China’s industry
Oct. 19, 2021
The 2021 China Pesticide Exporting Workshop (2021CPEW), organized by AgroPages, was successfully held in Hangzhou, China on 28-29th September, 2021. Despite the postponement of the event due to the spread of the COVID-19, the 2021CPEW still attracted 450 participants from over 200 companies (including the representative offices/branches in China of overseas companies). With Shaoxing East Lake High-Tech Co., Ltd. as the exclusive title sponsor, the event was co-organized by IBI-LYDD and Zhejiang Yongtai Technology, and vigorously supported by CAC Nantong Chemical, Hubei Xingfa Chemicals Group, Lier Crop Science, Shandong Huimeng Biotech, REACH24H Consulting Group, Trust Chem, Jiangsu Weunite Fine Chemical, Hebei Xingbai Agricultural Technology, Jebagro GmbH, Zhejiang Corechem Crop Technology, Anyang Quanfeng Agriculture Chemical, Sichuan Lomon Bio Technolog, Nufarm, Jiangsu Nongbo Bio-Technology, JiangSu YongKai Chem, and Hangzhou Udragon Chemical.
The 2021CPEW was held against the backdrop where the domestic pesticide industry is undergoing continuous integration and improvements, the international shipping and other transportation pathways are obstructed, and the dual-control policy is gradually implemented throughout China. The workshop focused on hot issues including the global new patterns for agricultural development, product planning and upstream/downstream supply chain, overseas markets, etc. More than 30 distinguished guests from home and abroad shared their views and insights associated with the industrial development trend from varied perspectives, including the latest policies, import and export data, hot products, and product registration.
Now, the videos of all presentations made on 2021CPEW are available online. You can simply sign up for Virtual Participation and pay US$298 to access them (All Chinese presentations are translated and added with English subtitles).
Yan Duanxiang, Deputy Director of ICAMA
Yan Duanxiang, Deputy Director of the Institute for the Control of Agrochemicals, Ministry of Agriculture, China (ICAMA), attended the workshop and made the opening remarks. Yan stated that despite the severe circumstances of the COVID-19 pandemic, China’s pesticide industry took due responsibility and contributed heavily to the global pesticide production by supplying various products to a number of countries. With the prices remaining high last year, the export volume increased by 1.51% year on year for the period from January to August 2021, and the export volume (converted to 100% active ingredient) came up by 7.1%. In fact, the current increase in pesticide prices helps regulate production and reduce the use of all pesticides, especially chemical ones. Yet in the long run, it is thought-provoking whether any drastic fluctuations will occur and affect the sustained, stable and healthy development of the pesticide industry.
It is hard for small- and medium-sized enterprises to innovate chemical compounds based on their own R&D capabilities. Then how should they do to deliver products with stronger competitiveness by improving process and engineering technologies? According to Ji Sheng, General Manager of the title sponsor Shaoxing East Lake High-Tech Co., Ltd., said that unlike conventional workshop projects, their company applies leading-edge micro-reactor technology (MRT) in the production of ethrel. Dramatic improvements have been shown especially in terms of floor space occupied, among others including steam consumption, operators required, and power consumption. East Lake High-Tech put its 10kt/a-level micro-reaction system into operation in September 2016.
ICAMA senior agronomist Cao Bingwei demonstrated some data about pesticide production, consumption as well as import/export volume, and shared the policy updates regarding export-only registration. Over the past ten years, the production of pesticides has increased by 28% and the exports has grown by 34.2%. The proportion of China’s pesticide exports to the total production rose from one-third to three-quarters. In 2020, 1.7 million tons were produced, among which 1.269 million tons valued at US$11.68 billion were exported, accounting for 74% of the total. Around one-tenth of the total exports was export-only pesticides. As of the end of 2020, China has sold 147,000 tons of pesticides only used overseas at US$590 million, accounting for 27% and 40% respectively of the year’s export growth. Pesticides only used overseas have become a new factor promoting the growth in pesticide export. The top ten pesticide export destination countries held a stable market structure in year 2020, making expansion quite hard. Therefore, Cao suggested that foreign trade companies should focus more on those lower-ranking countries. Moreover, with the mutual recognition of pesticide registration information in countries along the Belt and Road, Argentina, Egypt, Iran, Pakistan and other countries with agriculture taking a large part of their economy will also become regions contributing to the pesticide export growth.
Dai Ketao, Director of Food Industry Supply Chain from Syngenta Group China MAP, shared MAP’s business layout and development progress. MAP has established strategic relations with more than 200 industrial partners (in the fields of seeds, pesticides, agricultural machineries, smart farming, etc.). It adopts a centralized procurement model, implemented by the headquarters whenever certain differentiated or sizable goods are needed. Wheat head blight and maize ear rot are of MAP’s particular concern lately. Dai expressed their anticipation to explore way out jointly with companies who possess valuable resources in this area.
Wang Ting, Senior Vice President and Founder of IBI-LYDD, shared with the participants their practices and thoughts gained from the development of the industrial Internet. In the digital times, the innovation of contents on the industrial Internet significantly influences the industrial innovation and upgrading, while the mining of industrial big data and innovative application has become an important support to satisfy the real economy’s appetite for Internet contents. The history of IBI coincides with the history of industrial e-commerce services. By fully leveraging its strengths and focusing on content innovation on the industrial Internet, IBI actively proved itself in the innovation and upgrading of the service industry.
The global food production and sales is closely bound up with the crop protection industry. Researcher Zhou Mi from Chinese Academy of International Trade and Economic Cooperation (CAITEC) analyzed the global yield trends of grains and cereals, wheat, coarse food grains, rice, oilseeds, and sugar crops in recent years, and offered several suggestions for Chinese agricultural enterprises to get themselves engaged in international trade in terms of digital farming, supply chain, trade rules, etc.
Since 2018, India’s agrochemical exports has been growing, and reached almost 31% in the first half of 2021. Senior Researcher Analyst Rohit Nagraj from India Emkay Global Financial Services demonstrated in his presentation the bold ambitions of Indian companies to expand the agrichemicals market. India relies on China for raw materials, which account for nearly 50% of its total imports. However, for the past few years, Indian companies are trying to reduce this dependence by shifting its product chain upward. Rohit stated that 11 Indian companies including Bhagiradha Chemicals & Industries Ltd. plan to invest more than INR18 billion, a qualitative leap from that five years ago.
Since September, some local governments in China have gradually or even overly implemented the energy-consumption dual control measures such as power brownouts, production curtailment and even shutdown, with an effort to control the growth of high energy-consuming industries within a reasonable limit. Chen Libang from the Strategic Development Division of Yunnan Yuntianhua Co., Ltd. analyzed this situation from two aspects: first, it is understandable that some local governments may have placed certain restrictions on power usage and production, trying to fulfill the energy consumption targets for the second half of the year; the second reason is energy structure adjustment and industry energy conservation – the total of hydropower, wind power, and PV power generation represents less than 30% of the aggregate supply, a much smaller proportion than expected; that made power brownouts and production curtailment unavoidable. China attaches great importance to the peak emissions & carbon neutrality pledge, and it will dominate China’s national policies for the next 10, 20 or even more years. Chen suggested that enterprises should have a forward-looking understanding and expectations about policies and government moves to gain the initiative.
Fluorinated pesticides plays an important part in the development and application of the pesticide industry. Xiao Lifeng, Vice General Manager of Dalian Join King Fine Chemical, has been engaged in exploring fluorinated pyridine products for years. He pointed out that currently China has surplus capacities for producing fluorobenzene intermediates due to a long period of development; the research and development on trifluorotoluene intermediates started later but swift progresses have been made in recent years; heterocyclic aromatic compounds especially fluorinated pyridine ones are less developed, with only a few domestic research facilities and manufacturers having mastered the technology for synthetically manufacturing pyridine intermediates. Therefore, it is anticipated that in the next few years, fluorinated pyridine intermediates will become one of the major research focuses in the domestic circle of fluorinated intermediate R&D.
Yu Yang from CAC Nantong Chemical, talked from an overall perspective about the major challenges faced by the agrochemical industry in recent years, the evolution of the market structure, CAC’s development history, as well as the projected development trends of the industry. According to Yu, while the agrichemical industry was suffering from “environmental protection storms” and problematic safety issues in the past few years, CAC saw it as an opportunity for improving its safety, environmental protection and quality system by benchmarking against DuPont’s QEHS system. In-depth assessments were carried out on environmental and safety risks as a step in project selection. Attaching great significance to the research and development of patented technologies, CAC established an in-house research center as early in 1995. For example, cleaner production techniques are applied in 2,4-D production, so that no offensive smell is emitted.
Recently, the prices of glyphosate and glufosinate continue to rise. Liu Xiaowei, General Manager of Lier Crop Science reported about the end application scenarios of L-glufosinate in China. Lier has made a preemptive strike in the L-glufosinate market and has its 10%, 15%, and 20% L-glufosinate products registered already. According to Lier’s calculations, about 8,000 tons of L-glufosinate products have been offered in Chinese market since the beginning of 2021, leaving wide spaces for growth for a new product. The L-glufosinate products also have great potential in the GMO market.
Li Hongjun, Assistant to the General Manager of Hubei Xingfa Chemicals Group Co., Ltd., analyzed, from the GMO point of view, the possible development opportunities for non-selective herbicides and challenges that the glyphosate industry faces in supply. Many factors are expected to promote the sales of herbicides such as glyphosate, including the increased number of African countries growing GMO crops, the development of crops with multiple resistance traits, and the progress China has made in planting GMO maize.
Dialogue session in Xingfa Forum
In the afternoon of the 28th, the dialogue session Xingfa Forum was held. Yu Yang, Li Hongjun and Liu Xiaowei shared their respective views about the prospects of non-selective herbicides. Li Hongjun believed that as the US EPA once again concluded that glyphosate is not likely to be carcinogenic to humans and with the positive change of the EU regulations, glyphosate would keep thriving in the market. Regarding the competition among non-selective herbicides, Liu Xiaowei said that glyphosate and glufosinate would develop together, and eventually bring solutions to the resistance issue as the GMO seed technology evolves, leading to a bright future for growers around the world. According to Yu Yang, superposition of resistances in GM crops would become an inevitable trend in the future. Growers need to choose different varieties and usage to suit their ecological environments. Therefore, all the three major non-selective herbicides would be interdependent and complementary to each other. The guests also discussed with the attendees the impacts of yellow phosphorus resources have on downstream products, the price trend of glufosinate, etc. Liu Xiaowei stated that price trends are the inevitable result of changes in the supply-demand relationship. He said that domestic manufacturers of formulation products have to continuously reduce their profit margins as caught in a dilemma – between the cost pressure and the farmers’ demand for pesticides. He called on companies to further guarantee the supply to the domestic market, so that Chinese farmers have access to what they really need.
Technology Chief Engineer Cheng Jingshun from Shandong Huimeng Biotech presented a detailed overview on L-glufosinate, covering its mechanism of action, production techniques, intermediate synthesis, and related project information. The synthesis process of L-glufosinate is quite difficult and mastered by only a few companies up to now. Huimeng Biotech obtains L-homoserine through biological fermentation, and uses it as the raw material to produce L-glufosinate via amino protection, phosphorization and hydrolysis. The e.e. value of the products reaches 100% and the technical route features simplicity but high yield. Huimeng Biotech cut the cost by half with the homoserine to L-glufosinate approach, reduced the cost for making L-homoserine through process optimization, and promoted the industrialized production of glufosinate from L-homoserine.
Ashish Dobhal, the India Region Director of UPL Limited, gave a lecture on UPL’s domestic and global business. He said that UPL offers diverse services. The company attaches great importance to the agricultural sustainability and is committed to promoting it through technological innovation and effective global collaboration.
Brazil is an important agricultural market pursued by numerous agrochemical companies. Three industry experts from Brazil introduced the general situation of the Brazilian agrochemical market and the opportunities it provides. Antonio Ayrton Morceli Junior, a former breeding expert from Monsanto Brazil, spoke of the new soybean planting technology, industry prospects, and chemical market in Brazil. He believes that Intacta is the No. 1 among all the latest soybean planting technologies applied. Making its debut in the Brazilian market years ago, it keeps an annual growth rate of 4% with the current market share of 75%.
Andre Dias, Senior Managing Partner from Brazilian consulting company Spark-Strategic Intelligence, also talked about the application of Intacta technology in Brazil. The planting proportion of GM soybean Intacta is as high as 95% in Mato Grosso do Sul. Andre also presented in his report Brazil’s plant protection market dynamics, changes in distribution channels, soybean pests and diseases, popular products in the market, etc.
What are the impacts on the Brazilian market due to price increase of glyphosate and glufosinate? João Carlos Gonçales, Procurement Manager from CCAB By InVivo, highlighted the changes in the quantity and price of glyphosate, glufosinate and diquat. He pointed out a critical problem, namely, Brazilian importers and even planters are under great pressure due to the rising price of glyphosate. He also mentioned that the competitiveness of WG formulation is weakened by locally produced glyphosate bit by bit. Talking about glufosinate, he said that because the prices of technical materials in the Brazilian market have dropped from one year ago, glufosinate formuation importers have to pay more for imported goods but sell their products at lower prices. Apparently, this situation is more beneficial for local manufacturers. Diquat gets more opportunity in Brazil as paraquat is banned there.
Beatriz Damm Diaz, Regulatory Affairs Manager from Grupo Dragon, introduced the development prospects of the Mexican agricultural market. The main agricultural products for export of Mexico are agave, sugar, cocoa, orange juice, as well as avocado, tomato, strawberry, cucumber, onion, orange and tangerine. Even during the COVID-19 pandemic in 2020, Mexico’s agricultural exports to the US reached a record high. It is forecasted that by the end of 2021, the volume will hit US$29.5 billion with the highest growth ever.
Dialogue session in Huimeng Forum
On the morning of the 29th, Huimeng Forum, another wonderful dialogue session of the CPEW was held. Senior procurement experts including Regional Strategic Sourcing Lead - China Ext Mfg Xu Jianbo from Corteva, China Procurement Manager Peng Yige from Syngenta, and General Manager Ji Qiang from Biesterfeld Shanghai shared the problems they encountered in procurement and their experience learnt. The three speakers talked about what changes had the dual-control policy caused to their working pace and mental state. They also exchanged with the audience their views on the policy, and what are the multinational corporations doing to adapt their strategies to the new policy environment. According to Peng Yige, Syngenta would screen products in the R&D stage to select those emitting less carbon, seek for new process-based products, and cooperate more closely with suppliers to actively respond to the challenges of global carbon emissions reduction. Ji Qiang said that Biesterfeld, as an asset-light company, cares more about short- and medium-term operations. He believes that both buyers and suppliers should take policies associated with peak emissions & carbon neutrality as part of their “new normal” management, so as to keep a firm grip of it. Regarding the model of technology output-based business outsourcing, Xu Jianbo said that Corteva would conduct thorough risk assessments on existing suppliers, apply control measures, eliminate exclusive supply, and add foreign supply options. All of them were extremely optimistic about the long-term development of China’s chemical industry. They unanimously expressed that no country could replace the role of China in the supply chain, whether in terms of infrastructure, chemical supply chain, or human resources and spirituality. In the subsequent Q&A part, the experts answered questions such as inventory and procurement, and discussed with the audience.
Technical Supervisor Zhang JingJing from REACH24H and General Manager Robert Kiefer from REACH24H USA respectively introduced the pesticide registration in the European Union and United States. Specifically, Robert presented the pesticide registration laws and regulations, registration process, current registration status, registration classification of technical materials, data compensation strategies, formulation registration, etc. in the United States. Zhang Jingjing shared the EU’s regulatory system, approval and re-assessment of active ingredients, approval criteria for active ingredients, data gap analysis, re-assessment process, formulation registration strategies, etc.
Nick Read, Founder of N-Sight Advisory Services, analyzed in detail the dealers’ situations in the Baltic, Poland and Romania as part of the eastern European market. He specifically noted that the dealers in these regions mostly cooperate with multinationals to minimize market competition.
Wu Kang, Technical Director of Hills Consulting, demonstrated the EU agricultural market and relevant product varieties with detailed data. He said the over 50 million hectares of wheat planted in Europe is the largest crop market there. A huge amount of fungicides are used for wheat. The most common disease of wheat is leaf blight, and the most pesticides being used against which are prothioconazole, epoxiconazole, tebuconazole, and difenoconazole. However, it should be noted that triazole metabolites still entail risk of re-assessment.
Africa, as an emerging pesticide market, is now a favored place of pesticide companies. Yet it is poorly understood by the industry. Manoj Cheloor, Purchase Manager of Borlaug Chemicals DMCC (Topex) and Timothy Munywoki, Senior Agronomist from Amiran Kenya LTD, respectively introduced the agricultural and agrochemical markets in Cote d’Ivoire, Kenya and other parts of Africa. According to Cheloor, glyphosate and 2, 4-D are mostly used in Cote d’Ivoire. However, the price of 2, 4-D has risen by 38% since January 2021, and that of glyphosate by 82.5%, leading to the price increase of formulations that is unaffordable for farmers. Cote d’Ivoire is the world’s largest producer of cocoa beans and a major producer of cashew nuts. The output of cocoa beans was reduced substantially due to some major diseases and pests. Therefore, pesticides for controlling common diseases of cocoa beans have greater potential. Reputed as “green gold”, avocado is highly popular in the European and Middle Eastern markets. In recent years, a lot of farms and planters in Kenya have begun to grow avocado, lifting the yield rapidly. During the period from 2015 to 2018, Kenya’s total imports of insecticides, fungicides and herbicides went up from 6,400 tons to 15,600 tons, an increase of 144%.
Thomas Reitz, Group Head of Crop Protection & Seeds from Solevo Suisse SA, concentrated more on marketing strategies and key goals. He shared the company’s experience in market exploitation as a dealer who has worked in seven African countries for years, saying that segmented markets are the most potential part, and pesticide companies should seek their own “marketing route” based on the respective situation and background of each country.
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