Review of China's Fungicide Market in 2011   

By Zhang Weinong

Since the beginning of 2011, fungicides have taken the spotlight in China's pesticide market. The nation's output, import and export of fungicides all grew more than 20% year on year (yoy).


Production and sales grew vigorously

There are three reasons for the growth of fungicide demand in 2011. First, in recent years, China has allocated increasing acreage to raising vegetables and fruits. Because vegetables, fruits and horticultural crops are susceptible to many kinds of diseases, their demand for fungicides is usually several times that of staple crops. Second, the varieties of staple crops, especially food crops, grown in recent two years have relatively low disease resistance, so they need more fungicides than before. Finally, in order to keep them fresh while stored, fruits and vegetables should be insect proof and mildew proof.
   In the rice fungicide market nationwide, the demand for fungicides was relatively high, mainly for the control of rice sheath blight, false smut and rice blast. Unusual weather conditions favored outbreaks of wheat sheath blight, wheat stripe rust and vegetable and potato diseases in 2011, substantially boosting sales of propiconazole and its formulations, triadimefon, carbendazim, thiophanate-methyl and cymoxanil mancozeb, each accounting for more than 5% of the total sales of fungicides for the year. In 2011, best-selling fungicides in China were midmarket and high-end products of several domestic pesticide producers, such as prochloraz produced by Jiangsu Huifeng Agrochemical Co Ltd, tricyclazole produced by Jiangsu Fengdeng Pesticide Co Ltd, kasugamycin produced by Yanbian Chunlei Biochemical Reagents Co Ltd, and thiophanate-methyl and tebuconazole produced by Zhejiang Well-Done Chemical Co Ltd.
   Among all categories of fungicides, the domestic consumption and market value of triazole fungicides grew the most. The main reasons for this are: First, the proportion of their application in food crops increased; and second, the scope of their application in economic crops further expanded. China's production capacity of triazole fungicides has reached 50 000 t/a, and the total annual output of technical-grade triazole fungicides has exceeded 20 000 tons. In 2011, the domestic consumption of triazole fungicides was more than 10 000 tons, accounting for about 15% of the total domestic consumption of fungicides. Triadimefon, tricyclazole and propiconazole are the three best-selling triazole fungicides, and their combined sales volume account for more than 80% of the total sales volume of triazole fungicides. While the demand for them rises, their prices have also climbed slightly. For example, the price of triadimefon TC (technical grade) has risen from RMB53 000 /t up to RMB58 000 /t, tebuconazole TC from RMB75 000 /t up to RMB85 000 /t, and carbendazim TC from RMB31 000 /t up to RMB34 000 /t. The prices of bulk fungicides have grown 20% to 35% on average. A salesperson from Jiangsu Red Sun Group said that outbreaks of wheat diseases were more frequent in 2011 than in previous years, and seeing the demand, the company increased the prices of its fungicides in the spring, but sales still grew. After Shenzhen IPROCHEM Co Ltd raised the prices of its products like chlorothalonil, thiram and metalaxyl, sales of these products did not decline in 2011.
   The output of major fungicide production bases in China was greater in 2011 than in 2010. Shandong province produced 3 242.78 tons of high-quality fungicides in total in 2011, up 12% year on year. Jiangsu province had a total fungicide production of 44 794 tons in the first nine months of 2011, up 24.3% yoy; including mancozeb 8 193 tons, up 4.3% yoy; tebuconazole 3 301 tons, up 210%; carbendazim 12 096 tons, up 54.4%; chlorothalonil 5 906 tons, down 7.3%; thiophanate-methyl 3 574 tons, up 29.3%; and triadimefon 1 495 tons, up 20.9%.
   According to statistics, 60% of China's fungicide output is for export. The export situation of fungicides in China was better in 2011 than in previous years, and exports to Europe increased. European, South American and Southeast Asian fungicide companies had a strong desire to procure high-quality, cheap fungicides made in China. And they also expected to find Chinese partners, trying to open the Chinese market for their high-end products. In 2011, Shandong province exported 1 505.4 tons of fungicides, up 53.92% yoy. The marketing manager of Jiangsu SevenContinent Green Chemical Co Ltd, which is known as a "fungicide base," told reporters that the company's output of triadimefon, paclobutrazol, uniconazole and tebuconazole in 2011 totaled nearly 10 000 tons, of which 60% was for export, and the company's net profit increased substantially in the year.


New products kept emerging

In recent years, the update of fungicides has become increasingly faster, and old products are constantly being replaced by new ones. Shenyang Research Institute of Chemical Industry developed flumorph, enestroburin, SYP-Z048 and SYP-1620. Zhejiang Longwan Chemical Co Ltd developed thiediazole copper, a new fungicide for vegetables. And Foshan-based BrightMart CropScience Co Ltd developed edifenphos for the control of rice blast. All these new fungicides are highly marketable.
   Farmers' demand for efficient, low-toxicity and pollution-free fungicides is increasing. In the rice disease control market, the demand for traditional biocide Jinggangmycin has gradually declined, and new fungicides like hexaconazole, tebuconazole and polyoxin keep emerging to seize market share from Jinggangmycin. In recent years, in the fight against rice blast, in addition to some conventional fungicides like kitazine, iprobenfos and isoprothiolane, there are some new and efficient fungicides, such as ethylicin, kresoxim-methyl and especially prochloraz, which is called a miracle fungicide by rice farmers due to its effectiveness in controlling rice bakanae disease, rice blast, sheath blight and false smut. Jiangsu Huifeng Agrochemical Co Ltd is China's largest producer of prochloraz. In the face of growing demand for such fungicides year by year, the company planned to produce about 3 000 tons of prochloraz TC in 2011. In order to meet the market demand, the company has also developed copper (2+) and zinc salts of prochloraz and other proprietary derivative products.
   Potatoes are a major crop in Heilongjiang province. In recent years, late blight has often been a problem. The 50% flumorph + mancozeb WP, developed by Shenyang Research Institute of Chemical Industry, has significant control effect on such diseases. Banana leaf spot is one of the major banana diseases and was very difficult to prevent and control in the past. The myclobutanil + mancozeb WP, made of difenoconazole, myclobutanil and mancozeb, is an excellent new fungicide for the control of banana leaf spot and is favored by banana farmers.
   As the promotion cost of new products is huge, their prices are generally about 10% higher than conventional products. New fungicides are generally more effective than conventional ones. Although the prices of new fungicides are higher, their proportion in large farms' fungicide consumption mix increases. And farmers are also willing to use new fungicides for cash crops. With increasing acreage given over to fruit trees, vegetables and other cash crops, the demand for new fungicides also increases.


China's fungicide producers are troubled with both domestic overcapacity and fierce competition

China's fungicide market has a lot in common with its insecticide and herbicide markets. First, the fungicide market faces overcapacity and intense competition; second, the inventory of fungicides is already high,