Review and Outlook of China's Pesticide Market        

By Zhang Weinong, Pesticide Market News    

For China's economy, 2009 is the most difficult year since 2000 and has now become history. For China's economic and social development, 2010 will be a year of very crucial. In this year, China shall consolidate its economic recovery basis, achieve sustainable development and further integrate its development with the world's development.  


1. Review of Chinese
pesticide market in 2009


In 2009, as the international market demand declined under the shadow of the global financial crisis, China's pesticide exports dropped sharply. China's domestic pesticide market became extremely competitive due to similar quality and grade levels at low side. China's pesticide industry witnessed drop in the total output value, sales revenue, exports and profits. But on the other hand, in 2009 China became the world's largest producer, exporter and consumer of pesticides. In 2009, China's total output of pesticides reached reportedly 2.26 million tons (according to the data from China's National Bureau of Statistics, including the output of pesticide formulations), up 12.3% year on year, and China's export and consumption of pesticides were about 500 000 tons and 326 000 tons, respectively. After 60 years of development, the product portfolio of China's pesticide industry is becoming increasingly more reasonable. In 2009, China's outputs of insecticides, fungicides and herbicides rose by 5%, 8.1% and 18.26% year on year, respectively, accounting for about 35%, 10% and 36% of China's total pesticide output (The herbicide output accounted for 32.4% of the total pesticide output in 2008). Due to the change in the crop plantation structure, the demand structure for the three major categories of pesticides in China's rural areas has also been changing. In other words, the demand for insecticides has reduced significantly, while the demand for fungicides is increasing year by year. The demand for herbicides grows fastest.

1) The market demand for the three categories of pesticides declined, and their prices continued to fall

In 2009, the demand for insecticides reduced a lot in China. Rice is one of China's major crops, having more yield than any other crops. As pest hazards happened in rice field were not serious in 2009, the sales volume of conventional insecticides, such as chlorpyrifos, buprofezin, triazophos, profenofos, dimehypo and dichlorvos, used for the prevention and control of rice insects fell sharply. With the expansion of transgenic (generally modified) anti-insects cotton plantation acreage, the sales of insecticides, such as imidacloprid, cyhalothrin, omethoate, phoxim, endosulfan, for the prevention and control of cotton insects also dropped. The widespread use of avermectins in the prevention and control of insects happened in fruits, vegetables, rice and wheat has squeezed the market share of organophosphorus and pyrethroid insecticides.
   Because fungicides, such as tricyclazole, tebuconazole, triadimefon, mancozeb, used for the prevention and control of the wheat stripe rust have similar efficacy, they were oversupplied in China and their sales volumes were dropping. Due to the high drug resistance of fusarium graminearum, the demand for conventional staple fungicides, such as carbendazim, thiophanate-methyl and benzoimidazoles, dropped in Jiangsu and Zhejiang provinces and Shanghai municipality. Because the rice diseases were not serious in 2009, the sales of Jinggangmycin and isoprothiolane fungicides were sluggish, which are used for the control of rice sheath blight and rice blast, respectively.
   The competition in the herbicide market was even more intense than that in the fungicide and insecticide markets. The sluggish exports of glyphosate, paraquat, atrazine and metribuzin suppressed China's herbicide market. In order to seize the market share, Chinese producers of general purpose herbicides, such as acetochlor, bensulfuron and nicosulfuron, slashed prices for more sales, making the prices of herbicides fall to a historic low in China in 2009. For example, the price of butachlor dropped from RMB28 000/t in early 2009 to RMB21 500/t in October, the price of paraquat fell from RMB22 000/t in March 2009 to RMB14 000/t in the second half of the year, and the price of glyphosate was only RMB18 000/t in November 2009.
   In 2009 in China, the prices of imported pesticides rose, but the prices of exported pesticides fell and the prices of Chinese made pesticides generally dropped in the domestic market. According to the survey results of the Institute for Control of Agrochemicals of the Chinese Ministry of Agriculture of China, the average ex-factory price of 50 conventional staple pesticide varieties fell by 3.67% year on year, and the average sales prices of herbicides, insecticides and fungicides fell by 5.59%, 3.24% and 1.72%; respectively.

2) The demand for environmentally friendly pesticides increased

With the Chinese government's growing concern about the environment and food security, Chinese farmers have begun to use increasingly more green and environmentally friendly pesticides to make drug residues in their agricultural products reach domestic and international standards. Pyraoxystrobin, pyrametostrobin and paichongding (molecular: 1-[(6-Chloropyridin-3-yl)methyl]-7- methyl-8-nitro-5-propoxy-1,2,3,5,6,7-hexahydroimidazo [1,2-alpha] pyridine), the three novel insecticides developed by Chinese scientists, have been put into commercial production. Because of their high potency, low toxicity and low persistence, their sales volumes were very good in 2009. Avermectins and emamectin benzoate, by means of great effectiveness in the control of rice insects, became popular biological pesticide varieties and were actively promoted in Hunan, Hubei, Anhui, Jiangsu and Guangxi provinces, both with sale amount of technical material exceeding one thousand tons in China in 2009. These two pesticides have been used to prevent and control insects in 1.7 million hectares of crop plantation, helping reduce the usage of organic phosphorus pesticides by around 20 000 - 30 000 tons, and helping farmers save about RMB200 million of expenditure. The demand for new pesticides like pymetrozine, nitenpyram and glufosinate-ammonium grows rapidly. Pollution-free vegetables and fruits have a vigorous demand for biological pesticides like bacillus thuringiensis (Bt), azadirachtin, matrine, agricultural streptomycin, Nongkang-120 and polyoxin. Since the five high toxic organophosphorus pesticides like methamidophos were withdraw from the market three years ago, the Chinese Ministry of Agriculture have recommended nearly 50 alternative varieties, of which avermectins, chlorpyrifos and pymetrozine have become popular in the market.
   To meet the needs of green food production, several good-performance high-end insecticides made by foreign companies, such as Chlorantraniliprole, Virtako and Flubendiamide, and fungicides, such as Armure, Infinito and Cuproxat, have been imported into China and obtained very good sales results in Hunan, Guangdong, Anhui and Hubei provinces and Guangxi region, Although their prices are relatively high, Chinese farmers have recognized their effects and liked to use them, and dealers struggle for licenses to sell them.


2. The outlook of China's
pesticide market in 2010


In 2010, China's economy has gradually walked out of the shadow of the international financial crisis and has been recovering stably. The Chinese government has adopted a series of preferential policies for the agriculture sector, such as increasing investment in agriculture, raising the governmental purchase prices of crops and increasing agricult