Production and Development Trend of Pesticides in China
Year:2013 ISSUE:18
COLUMN:FINE & SPECIALTY
Click:196 DateTime:Nov.05,2013
Production and Development Trend of Pesticides in China
By Hou Changqing, Shandong Pesticide Industry Association
The pesticide sector in China comprises of 3 sub-sectors including i.Pesticide intermediates, ii.Pesticides technical and iii.Pesticide formulations.
Upstream are inorganic raw materials (such as yellow phosphorus and liquid chlorine) and basic organic raw materials (such as methanol and BTX (benzene, tolune and o-xylene)). Downstream are agriculture, forestry, animal husbandry and the health sector.
Despite the growth of the downstream demand, capacity surplus is still an important factor constraining the profit-making level of the pesticide sector in China. The capacity surplus today is a surplus caused by low-level redundant construction. Intermediates, pesticides technical and formulations with high technical content still have supply shortage. In order of output growth, there are herbicides, fungicides and insecticides. In terms of export structure, herbicides have always maintained a high export growth whereas the export growth of insecticides and fungicides has made a downslide in recent years due to impacts from external economic environments and domestic policies.
1 Features
The demand of grains in the world has promoted a lasting demand of pesticides. The development of genetically modified crops has brought about a higher proportion of herbicides and fungicides. The consumption proportion of pesticides in non-agricultural sectors has made an increase. Environment-friendly products with low toxicity and high effect have become targets of global pursuit. The proportion of pesticide formulations, water-based environment-friendly formulations in particular, has made an upgrading. In the global pesticide supply chain, there are also other features such as the increased ratio of mainstream products, the accelerated dissemination of new products and the stricter requirements on the sales of new products and the construction of new capacities.
Due to factors such as complicated geographical and climatic environments and low land concentration degree, the pesticide sector in China has some unique features.
(1) The diversification, differentiation and dispersion of the pesticide demands in China are prominent.
As the arable land area in China is not large, the proportion of the rural population is high and the land in rural areas is scattered, the sales and the demands of pesticides also have the feature of dispersion. The degree of intensive farming in rural areas has however made a drastic increase of nearly 25% in the past 6-7 years.
There are problems of low industrial concentration degree and serious capacity surplus in the pesticide sector. The market share held by foreign companies is on the increase. The product quality is low, the product brand is inadequate, the product variety is incomplete, the innovation ability is weak and the manufacturing process is outdated. The proportion of pesticide formulations has made an upgrading, but there is a serious similarity of products. The product structure needs to be improved.
(2) The product innovation ability in China is weak.
More than 1 300 pesticide varieties in the world have started commercial application today. Over 500 of them are commonly used. The number of pesticide varieties China can produce is however less than 300. The innovation ability in the pesticide production is quite weak. New varieties developed by China itself after 2005 are only around 16% of new varieties developed by major pesticide companies in the world. The price of export products is much lower than the price of imported products. It is also the reason for the low end of the industrial structure and the serious surplus of homogeneous products in the pesticide sector.
(3) The structure of pesticides technical and formulations in China still needs to be optimized.
Due to historical reasons such as incomplete varieties of genetically modified crops and relatively low market sales of agricultural production means in the consumption structure of pesticides in China, the proportion of insecticides is close to 42%. The consumption proportion of insecticides, however, dropped to around 35% in 2011, already approaching the demand of herbicides.
Table 1 Output of Pesticides Technical by Province in 2012 (ton)
Province/Region Output YoY Growth(%)
National total 3549090 19.0
Jiangsu 1055821 11.8
Shandong 825312 62.9
Zhejiang 300520 23.6
Hubei 295844 40.7
Hunan 267066 -29.2
Anhui 249630 25.7
Henan 199862 66.5
Sichuan 96340 -14.1
Inner Mongolia 62014 15.7
Jiangxi 38866 -1.5
Hebei 31927 -5.6
Ningxia 22431 74.5
Guangdong 21106 20.6
Liaoning 18012 -5.8
Shaanxi 16281 41.1
Shanghai 15325 10.6
Jilin 9395 -28.2
Fujian 8354 33.9
Tianjin 5693 5.9
Chongqing 3600 -5.3
Heilongjiang 3129 -10.2
Gansu 1667 63.4
Shanxi 755 -10.0
Guizhou 168 35.5
2 Pesticide production in China
Over 300 pesticides technical and over 800 pesticide formulations can be produced in China today. The output of pesticides in China increased from 1 million tons in 2005 to 3.54 million tons in 2012. By contrast, the annual consumption of pesticides was maintained stable during that period. The accelerated shift of the pesticide sector in the world has led to a serious capacity surplus in China.
The output of pesticide intermediates in China has also gone up since 1990. The output of pesticide intermediates in China was around 0.57 million tons in 1990 and increased to around 2.75 million tons in 2009 with a compound growth rate of 6.1% during 1990-2009. Pesticide intermediates produced in China today can basically meet the needs in the pesticide sector. Some intermediates still need to be imported from abroad.
As multinational pesticide companies are shifting the production of pesticide intermediates to developing countries, the export amount of pesticides technical and intermediates in China has presented a rising trend in recent years.
Pesticide intermediates in China are mostly primary intermediates with low technical content and low gross profit level. The gross profit level of advanced intermediates is therefore much higher than primary intermediates.
3 Conclusion
The price rise of farm products will promote the demand growth of pesticides in the Chinese market. The consumption proportion of herbicides and fungicides in China will have a constant increase. The merging and integration of pesticide enterprises will be an inevitable trend. Pesticides with high effect, low toxicity and low residue and water-based environment-friendly formulations will become development priority. Pesticide formulations containing nitrogen, fluorine and nitride groupings will be the future development orientation. Pyrethroid and pyridine pesticides will be main varieties for development. The rapid development of biological pesticides will become a powerful supplement to chemical pesticides.