Chinese glyphosate manufacturers decrease production for alternate maintenance, production capacity expected to drop by 1/3

Major Chinese glyphosate manufacturers have decided to alternately shut down plants to conduct maintenance from mid-November, reducing production by one-third, according to information from the glyphosate industry collaboration group.

This positively responds to the nation’s energy consumption control and carbon emission reduction policies. This is an action to utilize the limited phosphate resources to achieve a safe, green and sustainable development of the glyphosate industry. By reducing one-third of the total capacity, the monthly glyphosate production could decrease by nearly 20,000 tons per month. This is the first time glyphosate manufacturers have taken collective action to limit production to achieve the goal of work safety and green development through self-discipline. 

Glyphosate is the world’s largest pesticide variety and China’s largest single-production and export product variety among all pesticide varieties. Its importance within the pesticide industry is self-explanatory and self-evident. Therefore, a manufacturer’s every move and change in production capacity and pricing will become the focus of attention of domestic and international industry players.

According to data, in recent years, the annual output of glyphosate raw powder in China is primarily maintained at about 580,000 tons, about 10% of which is supplied for domestic use, while the vast majority is exported to the international market. So far, the global production capacity of glyphosate is roughly 1.2 million tons, of which Bayer produces 380,000 tons. There are ten prime manufacturers in China, which include Xingfa Group with 230,000 tons, Fuhua with 53,000 tons, Wynca with 80,000 tons, Jiangshan with 70,000 tons, Hebang Biotechnology with 50,000 tons and Anhui Guangxin with 50,000 tons, totaling to roughly 800,000 tons, accounting for about two-thirds of the world’s total capacity. 

Glyphosate price skyrocketed and declined in 2021-2022

Since 2021, there is an energy, food and industrial chain crisis due to the complex international political, economic situation such as the geopolitical instability, reemergence of COVID-19 and trade disputes. This imposed significant uncertainties on economic growth; the rise in raw material price, food price, and the continuous expansion of the planting area of GMO crops have all benefited glyphosate, which used to be a herbicide with a depressed market for many years. In 2021, glyphosate embraced its long-lost booming market. The price of glyphosate soared at one time from the lowest point of RMB20,000 per ton in January 2021 to RMB83,000 per ton in December 2021, an increase of 187%. 

However, since the beginning of 2022, due to dropping raw materials prices, the mindset is to chase the price rise rather than the fall and market speculation by traders. Therefore, the price of glyphosate technical started to decline from RMB79,000 per ton in January down to RMB52,000 per ton in mid-November, a decrease of 34%. According to industry analysts, the current trend in the glyphosate price will continue to be low, attributable to the increased stocks, weakened resistance to price, lack of confidence from the downstream industry and the ″wait and see″ attitude of international buyers. 

2021-2022 Glyphosate Technical Price Indications (RMB/ton)

To implement nation’s energy consumption control and carbon emission reduction policies, glyphosate manufacturers are actioning

The overly higher price and overly lower price are not conducive to safe, green and sustainable development of the glyphosate industry. Since 2021, due to the strong market demand, higher profit margins and promising market expectations, almost all glyphosate manufacturers have been running at full capacity last year, which brings a hidden danger to work safety, although remanufacturers have made huge profits.

Future of glyphosate still promising

In recent years, the global glyphosate market value has stayed at about US$5.6 billion. Concerning such a large product variety which has a high degree of concentration of production with periodically high market volatility, it is predicted that the rigid global demand for food, the continuous expansion of the GMO crop planting area and the better cost performance over other burndown herbicides will enable glyphosate to still maintain its promising prospects in the next 5 to 10 years.