ICAMA: Price index hit a peak in January 2022, expected to still stay high this year

In the 2022 China Pesticide Exporting Workshop (CPEW) organized by AgroPages on August 16-17, 2022, Mr  Cao Bingwei, senior Agrologist of the Chinese Ministry of Agriculture and Rural Affairs (ICAMA) revealed nearly exports of 85% of China’s total pesticide output in 2021, which was 1.53 million tons, with export value exceeding RMB100 billion for the first time.

About 2022 CPEW event

Cao Bingwei, Senior Agrologist from Institute for the Control of Agrochemicals (ICAMA)

At the CPEW, Cao Bingwei, Senior Agrologist from Institute for the Control of Agrochemicals (ICAMA), made an analysis of the latest export data of Chinese pesticides. Before the outbreak of COVID-19 in 2020, 2/3 of Chinese pesticides were exported. After the outbreak of COVID-19, the global supply chain became quite volatile, where demand for Chinese pesticides increased. In 2021, China exported 1.53 million tons of pesticides (converted to 100% content as basis), which accounted for 84% of China’s total output of the year, at an export value of RMB110.3 billion, exceeding RMB100 billion for the first time, whilst territory of trade covered more than 180 countries and regions. The pesticide exportation involved about 820 pesticide manufacturers, nearly 1,000 foreign trade companies and more than 500 pesticide varieties.

Review of Chinese pesticide export in last 10 years

From the export structure perspective, from 2011 to 2020, the percentage of export of pesticide technical gradually decreased, from 68% down to 58% in the past decade, whilst the percentage of export value decreased from 63% to 59%.

Volume and Value of Chinese Pesticide Export 2011-2020

The category percentage of Chinese pesticide export serves as an indication of the international pesticide demand structure. At present, the export of pesticides continues to be dominated by herbicides. By 2020, the percentage of herbicides increased to 71%; insecticides accounted for 15% and fungicides accounted for 12%. During the epidemic, herbicide exports led by glyphosate accounted for over 80%.

Category Percentage of Chinese Pesticide Export in 2020

So far as export destinations are concerned, Chinese pesticide exports are becoming increasingly concentrated. In 2020, export destinations covered 180 countries, including 24 countries to which export value exceeded $100 million accounting for 79% of China’s total export. After outbreak of the China-US trade conflict in 2019, Brazil became China’s largest pesticide export destination in 2020 for the first time, having superseded USA’s first place status which had lasted for more than a decade.

2020 Top 10 Destinations of Chinese Pesticide Export 

In 2020, Chinese pesticide technical export destinations involved 113 countries. As regards export value, value of export to 13 countries exceeded $100 million accounting for 76% of the total technical export volume and 73% of the total technical export value. The largest technical export destination was the United States, accounting for 14.74%, but the value accounted for over 18%. Compared with Brazil, to which export volume accounted for 1/5, the value accounted for only 15%. This situation revealed the higher prices of pesticides exported to the United States, meaning that exportation to developed countries is an important source of profit increase of Chinese pesticide manufacturers.

 2020 Top 10 Destinations of Chinese Pesticide Technical Export above $100 Mio 

In 2020, Chinese pesticide formulation export involved 179 countries and regions. In terms of export value, value of export to 8 countries exceeded $100 million accounting for 49% of the total formulation export volume and 41% of the total formulation export value; value of export to 47 countries exceeded RMB100 million, accounting for 92% of the total formulation export volume and 89% of the total formulation export value. Among the export destination countries, Ukraine ranked 8th in 2020, which is, however, expected to decline due to the trade blockage resulting from the conflict between Russia and Ukraine.

2020 Top 10 Destinations of Chinese Pesticide Formulation Export above $100 Mio

Chinese pesticide export in recent years

As shown on the Chinese pesticide export price index as below, the prices remained relatively stable from 2011 to 2017. In 2018 and 2019, Chinese pesticide production capacity appeared on the rise and the prices increased step by step. In 2020, there was a small drop in the epidemic, but in 2021, especially in the first half of 2022, the price level hit new high. According to the following latest price index, the high price level of pesticides still continues. There is still a gap in global demand to be filled up, which may be gradually stabilized by 2023. On the mid and long-term basis, Chinese pesticide enterprises need to be careful about expansion of production capacity.

2020-June 2022 Chinese Pesticide Export Price Index

According to the monthly price index in the last two years, the prices in 2020 were largely stable; export prices in 2021 began to rise, reaching the peak in November to December; in the first half of 2022, prices dropped slightly, among which the drop in May was caused by lockdown of Shanghai during the reemergence of COVID-19, resulting in a slight price decrease, which was however recovered in June.

The table below is a description of volume and value of pesticide export in 2021 and the first half of 2022. After the reemergence of COVBID-19 in Shanghai in April 2022, the pesticide export volume decreased sharply by 20%, but the value could still increase by 16%. After the COVID-19 was eased in May, export increased rapidly. In May, the volume increased by 45% and the value increased by 94%.

2021 - June 2022 Chinese Pesticide Export Data

In the first half of 2022, a comparison between export of technical and formulation shows that both declined significantly in April, where the export of technical decreased by 22% and that of formulation decreased by 15%, but the value of both increased. By June, export was stabilized, both with an increase of about 55%.

Jan-June 2022 Chinese Pesticide Technical and Formulation Export Data

Cao Bingwei mentioned in his report that there are currently complex international situations which lead to high uncertainties on international trade. While the China-Japan-ROK Free Trade Zone initiative has experienced certain difficulties, Chinese pesticide export to Southeast Asia and Northeast Asia becomes a focus of attention. Meanwhile, ICAMA’s mutual data recognition with the Belt and Road countries is in progress. In addition, Argentina, Egypt, Iran, Pakistan, Brazil and Russia have asked for more registrations of Chinese pesticides in their countries.

Globally, the rising grain prices will lead to price rise of agricultural inputs, being incorporated with the high energy price level, the prices of pesticides should remain high in 2022. Nevertheless, the supply and demand of pesticides are expected to stay relatively balanced, the market turbulence should be significant.