Yutian Analysis: Glufosinate | Stand high in popular favor

Sulfentrazone was analyzed in Episode02, which had 1,200 clicks, 19 shares and 16 votes. The popular products voted out by the readers are Glufosinate and Difenoconazole, therefore Glufosinate one of four famous herbicides, worth 10% of the shares, or around US$7.5 billion, while the other three herbicides, Glyphosate, Paraquat, Diquat share 55.77 (71%), $12.02 (16%) and $2.19 (3%) billion, respectively, (Data period 2018).
 

China and India Exports:

The global Glufosinate capacity is 43,100 tons, mainly contributed by China, India, United States (US) and Germany. China takes over 32,000 tons of the capacity and India probably is able to release 10,000 tons.

 

While comparing exports from China or India Exports, it is to be noted that the US is the biggest consumer of Glufosinate. India also had the Mexico market which China did not have. Among the other countries, their purchases from China were double that from India. Comparing the five-year figures, it is interesting to view the purchasing performance of several countries:
 

- Australia decreased imports from China since 2018, which used to be ranked No. 3 among the purchasing giants.

- Vietnam and Malaysia rushed into Top 3 year by year-end.

- Indian imports from China witnessed a peak in 2018 worth $37.6 million, while in the other years India imported less than $7 million worth of Glyphosate.
 

 (Source: AgroPages China/India Pesticides Exporting Analysis System, Data period 2015-2019).

 

 

1. World demand

2. Supply-demand relationship

3. The 5-year-price trend

4. The change of formulation

5. Main suppliers
 

The total demand for Glufosinate is 13802.44 tons, and the global sales reached $478.06 million (year 2018).

 

There are three major players worldwide, China and India supply the US.

(Following illustrates the relations between each other)

 

The price of Glufosinate-ammonium 95% TC, 2015-2019, is illustrated as follow. Its price decreased as the purchases rose. The end of 2017 was divided but after that, the exports grow sharply up to 19,620 tons. 
 

 

Three common formulations were 95% TC, 200g/L SL, and 50% TK. At the end of this analysis period, three new formulations showed up: Compound Glyphosate 30%+Glufosinate-ammonium 10% SL, Glufosinate-ammonium 50% SL and 280g/L SL.

There were more than 200 Chinese companies exporting Glufosinate. The main sources were in Lier and Yongnong.

 

The product was developed together by AgrEvo, Avertis, Bayer, Dupont and Syngenta in 1995, which successfully commercialized on soybean, oilseed and cotton crop.  

 

In the past 12 years, the market for Glufosinate in China has seen its ups and downs. Behind the changes in its implementation are the corresponding changes in supply and demand. Glufosinate has been a high-end herbicide for a long time, because of its good effect, low toxicity, and non-root-damaging characteristics, it is mainly used in economic crops such as fruits and vegetables. Before 2008, the price remained above 300,000 yuan/t, and the market supply and demand were relatively balanced. 

 

In 2008 and 2009, Glufosinate was affected by the global economic crisis, and global demand decreased, and the price fell below 190,000 yuan/t. In 2010 and 2011, as the global economy slowly recovered, the number of Glyphosate-resistant super weeds increased. The promotion of Glufosinate-resistant, genetically modified crops and the ban on paraquat in South Korea from 2012 to 2014, led to significant growth in Glufosinate sales. The price of the original drug returned to its selling price of more than 300,000 yuan/t in 2014.

 

Around 2014, due to the large profit margin of Glufosinate, and the announcement of the Ministry of Agriculture (now the Ministry of Agriculture and Rural Affairs) No. 1745, it was decided to withdraw the registration and production license of paraquat from July 1, 2014, and stop production, retain the overseas use registration of the parent company’s water agent for export, and allow exclusive use for export production. The sale and use of the water agent in China were stopped on July 1, 2016. After the introduction of the policy, the market generally believed that Glufosinate was a high-quality alternative to paraquat. After 2014, Huifeng, Red Sun, Good Harvest Wayne, Jiangsu Huangma, Rosi Chemicals, Sevencontinent Green, Shandong Binnong, etc. set up projects in Glufosinate, and as the supply increased significantly, prices fell in 2015-2016 with the annual price entering a downward channel. At the beginning of 2016, Bayer took the lead in lowering the price of Glufosinate preparations, which drove the price war between various companies, and the price of the original drug even fell to 117,000 RMB/t.

 

In 2017, under the superposition of various factors such as the expansion of the paraquat banned range, stricter environmental protection, and outstanding resistance to Glyphosate, the market demand for Glufosinate began to continuously increase, and the limited stocks led to an imbalance between supply and demand. The market recovered, the prices rose again and remained high. 

 

After the second half of 2018, due to the escalation of Sino-US trade frictions, climate-induced planting delays and other factors, global demand weakened but at the same time, supply increased, including the release of new production capacities by companies such as BASF and Lear Chemical, and there was oversupply. Thereafter, a price inflection point appeared. In November 2018, an enterprise in Jiangsu lowered the price of Glufosinate mother liquor to a new low. The superposition of many factors caused the price of the original drug to continue to decline in 2019, and the price of the original drug dropped to about 98,000 RMB/t.

 

At the end of 2019, affected by the suspension of the main manufacturer Lier Guangan and the suspension of production and the repairs at the main intermediate manufacturer Honghu Yitai, the supply was tightened and the price increased. At the beginning of 2020, the sudden new epidemic situation hit Hubei, the main producer of Glufosinate intermediates, resulting in a major impact on the supply of Glufosinate from China. 

 

In addition, the poor logistics caused by the epidemic further exacerbated the contradiction between supply and demand. Based on the above factors, it is expected that the overall supply of Glufosinate will be tight in the first half of 2020, and the price will rebound. The height and time of the price increase are still under observation, but the possibility of the market reversing to 200,000 RMB/t is not bright.