U.S. glufosinate import soaring year on year, why is there still a serious shortage in the U.S. market

Recently, some American readers of AgroPages have constantly contacted us saying that there is currently a serious shortage of glufosinate in the U.S. market although the retail price has somewhat fallen back, which still stays at the high level of $90-100 per gallon (mostly 280g /L SL). If we use the mean value of $95 to make a calculation, the price in rmb will be roughly RMB159,000 per thousand liters. However, the current price of glufosinate raw powder-based formulation is about RMB70,000-80,000 per thousand liters (mostly 200g / L SL), which can be converted into 280g / L and the price would be roughly RMB84,000-90,000 per thousand liters. 

Retail price trending in the U.S. glufosinate market from January 2021 to February 2022

American readers have expressed their concerns over the tight market and wonder when the short supply of glufosinate can be alleviated. In response to these concerns, AgroPages has made an analysis as follows: 

In 2021, the total import of glufosinate TC, TK and formulation into the United States reached 19,000 tons, which was about 11,000 tons as converted to 100% content. In 2020, the total import of glufosinate into the United States was 8,200 tons, which was about 3,500 tons as converted to 100% content. That is to say, the import volume of glufosinate in the United States in 2021 increased dramatically by 210% year on year. So, the question is, why is there still a serious shortage after a sharp increase in the import.

North America’s glufosinate shortage continued already for two years before 2021

2018 was the year with highest amount of glufosinate import in the United States except for 2021. In 2018, the import reached a total of 12,000 tons, or about 6,000 tons as converted to 100% content, of which 4,600 tons were contributed by China, 1,290 tons by India and 100 tons by others. In the earlier year, 2017, the total amount of glufosinate import in the United States was only 3,000 tons as converted to 100% content, which was 3,700 tons in 2019 and 3,500 tons in 2020.

U.S. glufosinate import volume as converted to 100% content

Based on the available data, the import volume of glufosinate in the United States remained low for two years. Let us take a look at what happened in 2018-2019.

•BASF executed agreements in October 2017 and April 2018 to acquire Bayer's businesses and assets divested due to the merger with Monsanto, which covered Bayer's global glufosinate non-selective herbicide business. 

•On December 26, 2019, the production line of glufosinate of a wholly owned subsidiary of Lier Chemical was closed down for a synchronized run.

•In October 2020, BASF announced closure of its base in Muskegon, Michigan, USA, as well as one of its three production plants in the Knapsack region of Germany. These two locations used to produce the non-selective herbicide glufosinate (GA) and its intermediates. The closure is expected to be completed by 2022 latest. 

In 2017-2018, the glufosinate business was handed over from Bayer to BASF, which affected the production of glufosinate in North America, according to the judgment of the writer. The closure process of the U.S. glufosinate plant in 2020 would once again affect the production of glufosinate in the North America (it is understood that the plant has switched to production of hand sanitizer in 2020 as a response to the COVID-19 pandemic). BASF's U.S. plant has a capacity of 6,000 tons of glufosinate, which is mainly supplied to the U.S. market and Canadian market. According to U.S. reader’s feedback, the demand for glufosinate in the United States and Canada totals to 8,000 - 10,000 tons, which if true will lead to a long-time shortage in the North American market, coupled with the affected capacity of BASF. 

Commercialization of GM crops increases demand for glufosinate

According to USDA data, in 2022 U.S. farmer’s planting of soybean will surpass corn, which is the third time in U.S. history. The USDA's Planting Intent Report shows that soybean acreage will increase by 4% over last year to reach 90.955 million acres, which will break the all-time high record of 90.2 million acres in 2017. In the interim, corn acreage declined. The total corn and soybean acreage is expected to reach 180.4 million acres, which is only a little lower than the record high of 180.6 million acres last year. GM soybean and corn acreage is going to take 95% and 93% of the total acreage respectively. With the continued increase in soybean acreage and the continued introduction of GM corn varieties, the demand for glufosinate in North America is bound to increase. 

Corteva’s launch of GM corn varieties in the U.S. and Canada in 2020

Further reading at https://news.agropages.com/News/NewsDetail---38175.htm 

-With the increasing in GM crop planting acreage, the demand for glufosinate in the United States will continue to increase.

-In 2021, the import volume of glufosinate into the United States reached a record high but seems to have merely met the market demand.

-The tight market does not rule out other impacts, such as from the COVID-19, difficult logistics and the affected production capacity.

Any inquiry please contact the author:

Email: erwin@agropages.com 

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