By Han Yongqi, Bureau of Industry and Information Technology of Penglai City
Pesticide industry in the 13th Five-Year Plan period (2016-2020)
While greatly propelling supply-side reform, domestic pesticide industry tried hard to improve product quality, upgrade technologies, decrease increment of pesticide usage to zero and deal with overcapacity in the 13th Five-Year Plan period. Further, green development of the industry was propelled via upgrading traditional pesticides to green or biological pesticides. The number of enterprises obtaining pesticide production qualification approached to 1 800 at the end of 2019, and 400 of them were pesticide technical producers.
1. Green development was promoted
Overall, domestic output of pesticides showed a downward trend in the 13th Five-Year Plan period. Pesticide technical output reached 3.78 million tons in 2016, 2.94 million tons in 2017, 2.08 million tons in 2018 and 2.25 million tons in 2019, and is forecast to fall continually in 2020 due to the coronavirus.
Pesticide firms actively implemented the nation’s Action Plan on Zero Growth of Pesticide Usage Amount in 2020, which led to continuous negative growth in pesticide usage amount. Thirty-nine kinds of high-toxic pesticides withdrew from the market, while green pesticides were recommended. Pesticide enterprises introduced advanced environmental technologies, and developed green manufacturing processes. Highly effective, low-toxic, and biological pesticides currently account for 78% of registered products.
2. Supply-side reform was propelled
Domestic pesticide industry actively conducted supply-side reform, optimizing industrial structure. In product mix, herbicides accounted for around 60%, insecticides 30% and bactericides 10%. Proportion of highly effective, safe and environment-friendly pesticides increased.
Further, supply-side reform made pesticide firms more concentrated. Combined output value of pesticide industry in Jiangsu, Shandong, Henan, Hebei and Zhejiang accounted for around 70% of the nation’s total. The five places were home to 28 pesticide firms with sales revenue of more than RMB1 billion, and most firms with sales revenue of RMB500 million – RMB1 billion. In 2019, 59.6% of domestic pesticide output came from Jiangsu (743 kt), Sichuan (392 kt) and Zhejiang (208 kt). Shandong, Hubei, Anhui and Henan all produced over 70 kt of pesticides in 2019.
3. Technical innovation stimulated the pesticide industry
Enterprises’ ability to innovate improved. At the end of July 2019, the number of new pesticide varieties, independently developed by China and formally registered, reached 37. At present, more than 10 varieties are widely applied. Industrial production has been realized for a batch of varieties with proprietary intellectual property rights, generating considerable sales revenue.
Five plant protection technical innovation alliances were established in 2016, involving self-propelled plant protection machineries, aviation plant protection, natural enemy insects, biological pesticides, highly effective & low-risk pesticides. More than 150 enterprises and R&D institutions cooperated to make more breakthroughs.
4. Pesticide export trade developed soundly
China has exported pesticides to more than 180 countries and regions in recent five years, including 65 countries along the One Belt and One Road. Export volume was up 19% YoY to 1.4 million tons in 2016, accounting for 37% of domestic output. The volume increased continually in 2017, reaching 1.47 million tons, up 6.9% YoY and valued at US$6.76 billion (up 20.4% YoY). The nation exported 1.41 million tons of pesticides in 2018, and gained US$8.07 billion. Export volume and export value both fell slightly in 2019, down 7.1% YoY and 1.5% YoY, respectively. However, pesticide export will inevitably be impacted by the coronavirus in 2020.
Outlook in the 14th Five-Year Plan period (2021-2025)
China’s pesticide industry will show five trends in the 14th Five-Year Plan period:
1. Green development
Disposal of waste water, waste gas and solid wastes arising from producing pesticide will meet higher standards given growing environmental awareness and stricter environmental regulations. Hence, upgrading pollutant treatment technologies will become more urgent for pesticide enterprises.
Highly effective, low-risk pesticides and biological pesticides will be increasingly needed because of the nation’s goals to meet international criteria on pesticide residue limits of agricultural products and decrease increment of pesticide usage to zero. In addition, scientific use of pesticides and packaging recycling will both be highly concerned.
2. Independent innovation
Strengthening innovation ability will be a key task so that more high effective and eco-friendly pesticides can be developed. Meanwhile, innovation will help enterprises improve equipment, cleaner production process and comprehensive recycling level. In the 14th Five-Year Plan period, the government will improve pesticide innovation system, and provide stronger support for firms in researching pesticides with proprietary intellectual property rights. R&D hotspots will include seed coating formulations, controlled release technology, nanotechnology, etc.
3. Digitizing and intelligentizing
Deep integration of industrialization and informatization will help pesticide enterprises enter the age of intelligence, phase out backward technologies and adopt more intelligent equipment. Future intelligent control will enable producers to supervise production, supply and sale of pesticides more effectively.
4. Structure optimization
One of key tasks of pesticide enterprises is to optimize industrial structure (product mix in particular) and resource allocation. Varieties of insecticides, bactericides and herbicides will all be upgraded continually, satisfying market needs with more reasonable product mix.
Pesticide enterprises will greatly develop: 1) insecticides and nematicides mainly used in pests that often appear or are hard to kill, underground pests, exotic pests, nematodes; 2) herbicides adaptable to reform in cropping systems and farming techniques; 3) new fungicides and viral inhibitors used in fruit trees and vegetables; 4) bactericides used in greenhouses, urban landscaping, flowers and garden plants; 5) seed treatment agents and environment-friendly fumigants; 6) plant growth regulators and fruit preservatives. In addition, inside players will also pay attention to pesticides used in non-agricultural areas and biological pesticides.
In the next five years, large groups with sales of more than RMB10 billion will be established via M&As, recombination, shareholding reform, etc. Regional distribution and resource allocation will both be optimized. Pesticide technical manufacturing firms will relocate to professional parks. Industry access conditions will be stricter for homogeneous products and products troubled by overcapacity.
5. Export promotion
Promoting pesticide export will rely on green products with high technical content and high added value. Proportion of insecticides, bactericides and herbicides will have a big change, and structure of export products will be optimized continually.
