Producers Don't Benefit from Glyphosate Price Hikes   

Since August 2011, driven by export orders from South America, the ex-factory price of glyphosate in China has reached a new high, increasing by RMB2 500 per ton. However, because production costs soar and international demand for glyphosate is not large, Chinese glyphosate producers do not benefit from this round of price hikes.
   As of the end of 2010, there had been a total of 131 registered glyphosate technical producers in China. But, the number of actual producers is now less than 20, and the overall operating rate of the industry is only 30%-40%. In 2010, China's new glyphosate capacity reached 136 000 t/a, making the nation's total glyphosate capacity in 2011 reach 1.166 million t/a. In 2011, the country's glyphosate technical output is estimated at 300 000 - 350 000 tons, down about 5% year on year. It is estimated that in 2011, the domestic consumption of glyphosate technical will be about 50 000 tons in China, the export of glyphosate technical will be about 220 000 tons, and the export of glyphosate formulations will be 230 000 tons. The global demand for glyphosate formulations will be about 600 000 - 800 000 tons in 2011. Thus, glyphosate continues to be in oversupply in China this year. Although the European Union cancelled its anti-dumping measures on China-made glyphosate in 2010, the production and sales situation of China-made glyphosate are still not optimistic. The raw material cost of glyphosate by the glycine route has risen from RMB20 000 /t in the first half of 2011 to RMB22 000 /t now, but the selling price of glyphosate is RMB only about 230 000 /t now, so most manufacturers lose money.
   So far, active glyphosate producers in the world except China are mainly Monsanto (the USA) and an Argentina-based company, and their combined glyphosate technical capacity is about 300 000 t/a, accounting for 25% of the global total. Their glyphosate plants are mainly distributed in the United States, Brazil and Argentina, and these countries are also the world's major glyphosate consumer markets, and their annual combined consumption of glyphosate accounts for about 60% of the global total. In the United States, Monsanto takes a massive price-cutting strategy. It is said that the selling price of the Monsanto glyphosate in the United States is only US$9 /gallon, only about US$0.5 /gallon higher than China-made glyphosate, so local customers are willing to purchase the Monsanto products, leading to the poor sales of Chinese glyphosate products there.