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Home » Agrochemical Exports from China

Agrochemical Exports from China

Agrochemical Exports from China
Dr. Matthew Phillips, Phillips McDougall - AgriService
Over the last decade, China has become a major source for the manufacture of agrochemicals, having a reputation for the provision of low priced product which in some cases has been perceived to be erosive to agrochemical pricing. This review will analyse the position of China as an exporter of agrochemicals and its position in the world market, as well as recent trends in the development of the country’s export business. The data used in this analysis is based on chapter 3808 of the export statistics which reports products packaged for retail sale; it does not include product that may be sold in technical form or under other classifications. The analysis has focused on herbicides, fungicides, insecticides and plant growth regulators, but excludes rodenticides, disinfectants etc. which are also included in chapter 3808.

Leading Agrochemical Exporting Countries 2009
Rank Country $m
1 France 2557.1
2 Germany 2466.2
3 USA 2104.2
4 Belgium 1617.5
5 China 1398.2
6 United Kingdom 972.0
7 India 708.3
8 Switzerland 704.4
9 Spain 608.9
10 Netherlands 589.4
11 Italy 559.7
12 Israel 468.4
13 Japan 336.7
14 Hungary 158.7
15 Rep. of Korea 135.6

The table above, which outlines the leading agrochemical exporting countries by value, shows that in 2009, China was the fifth largest exporter of agrochemicals worldwide. In the case of Belgium, it is possible that a proportion of the export total represents re-export of product which has entered through the country’s seaports.

The Table on the following page shows the breakdown of exports by the leading fifteen exporting countries in 2009 by herbicides, insecticides and fungicides. Also included is the average price of exports, derived from the total value and volume of all product sold. The data shows that in 2009, China was the fourth largest exporter of insecticides, the ninth largest exporter of fungicides and the fifth largest exporter of herbicides.

Leading Agrochemical Exporting Countries by Sector 2009
Insecticides $m $/Kg Fungicides $m $/Kg Herbicides $m $/Kg
1 USA 608.6 11.2 Germany 951.2 10.0 USA 1165.0 7.5
2 France 544.5 18.1 France 916.8 10.9 France 1095.8 14.5
3 India 500.2 7.8 UK 577.9 16.3 Germany 1092.1 16.9
4 China 437.7 3.5 Spain 459.7 12.0 Belgium 943.2 8.2
5 Germany 422.9 29.1 Switzerland 340.6 25.4 China 757.7 2.4
6 Belgium 367.0 17.2 USA 330.5 9.4 Israel 348.2 7.0
7 Switzerland 180.6 24.7 Belgium 307.2 11.0 Italy 256.3 11.9
8 UK 176.7 9.6 Netherlands 211.3 9.5 UK 217.3 7.4
9 Netherlands 161.9 10.6 China 202.7 4.1 Netherlands 216.2 9.0
10 Japan 146.6 32.8 Italy 184.8 10.2 Switzerland 183.2 25.3
11 Italy 118.7 7.4 India 129.4 4.1 Japan 117.5 26.4
12 Spain 113.9 6.1 Israel 116.5 9.5 Hungary 92.1 9.7
13 S. Korea 61.0 19.2 Japan 72.6 16.0 India 78.6 4.3
14 Hungary 26.3 43.1 Hungary 40.3 9.8 S. Korea 35.7 6.1
15 Israel 3.6 10.5 S. Korea 38.9 10.8 Spain 35.3 8.4

Whilst the table shows the relative position of China in each sector, it also shows that the average price of the exports from China in all cases is the lowest of the top fifteen exporting countries, although equal with India for fungicides.

The trend in the 2000s closely matches the performance of the global market, with growth in 2004, 2005 and 2008. The spike in 2008 driven not only by strong demand due to positive market conditions, but also the shortage of glyphosate that prevailed during the first half of the year and the high prices that could be charged at that time.

It is interesting that Chinese herbicide exports in value terms declined by 39.2% in 2009 to $757.7 million, but increased in volume terms by 14.3% to 321,633 Tonnes. A similar picture is seen for exports to the USA, perceived to be a major market for Chinese glyphosate, where exports declined by 35.0% in value terms in 2009, but rose in volume by 11.1%. This trend possibly being due to the lower prices that could be charged for glyphosate in 2009, when the sector returned to one of oversupply.
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Chinese Agrochemical Exports 2009
Rank Country Herbicides
$m
Insecticides
$m
Fungicides
$m
Total
$m
Growth
09/08 %
1 Vietnam 44.0 37.1 23.2 104.2 -12.6
2 Thailand 61.0 31.8 8.1 101.0 -39.0
3 USA 80.5 11.7 5.4 97.6 -36.6
4 Nigeria 60.0 17.8 0.4 78.2 41.2
5 Pakistan 13.0 47.6 4.5 65.1 9.9
6 Ukraine 38.6 11.4 10.1 60.1 - 33.3
7 Ghana 37.2 12.4 2.5 52.1 12.6
8 Indonesia 15.0 11.3 11.4 37.7 -49.1
9 Australia 30.2 4.6 2.6 37.4 -46.6
10 Japan 18.8 10.0 3.5 32.3 -36.3
11 Russian Fed. 23.3 3.6 1.6 28.6 -52.5
12 Brazil 16.4 8.9 3.1 28.4 -41.4
13 Uruguay 21.2 3.0 2.5 26.6 -50.1
14 Paraguay 16.4 8.3 0.3 25.0 -55.4
15 Turkey 9.9 10.1 4.7 24.7 -16.6
16 Philippines 4.1 11.5 7.0 22.6 -32.1
17 South Africa 8.6 11.2 2.6 22.4 -37.9
18 Malaysia 8.0 10.7 1.7 20.4 -13.2
19 Argentina 14.3 5.5 0.4 20.2 -50.8
20 Chile 8.3 8.6 3.3 20.1 -34.7
21 Colombia 11.6 2.2 6.3 20.1 -37.0
22 Cuba 6.0 6.6 5.6 18.2 24.7
23 Singapore 9.0 4.4 3.5 16.9 -60.4
24 Bangladesh 2.4 7.9 5.0 15.3 -26.2
25 Bolivia 6.6 5.6 2.7 14.9 -16.3
Sum 564.2 303.9 122.0 990.1 -30.5
Others 193.5 133.9 80.7 408.1 -28.2
World 757.7 437.8 202.7 1398.2 -29.8

In terms of value growth, it can be seen that the value of exports from China to most of the twenty five highest value destinations declined in 2009, the exceptions being the developing markets of Ghana, Nigeria and Pakistan.

Regarding the leading crop protection markets worldwide, Chinese exports of agrochemicals to the USA decreased by 36.6%, fell by 41.4% to Brazil, by 36.3% to Japan, with the leading EU markets no longer being in the top 25 export destinations.

It is evident that the leading country destinations for the export of finished agrochemicals from China are the more developing markets including Vietnam, Thailand, Nigeria, Pakistan, the Ukraine, Ghana and Indonesia. Other significant destinations are countries where it is relatively easy to obtain a generic registration, notably Australia and Argentina.

Of the major markets, the USA, Japan and Brazil are the most significant destinations for Chinese material; in comparison significantly less product is destined for European markets. It may however be that more technical material is exported to these countries, which would not be counted in Chapter 3808, and therefore not included in this analysis.

The following graph plots the average price of Chinese agrochemical exports against volume, and includes preliminary price data for the first half of 2010.

Volume of Chinese Agrochemical Exports and Average Price
The graph clearly shows the increasing volume of Chinese agrochemical exports since 1996, and the downturn experienced in 2006. It is evident that as the volume of exports increased in the early
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2000s, the average price of these products was slowly declining. The improvement in average prices since 2002 coincides with the recovery of the economies of many developing Latin American and Asian countries following the slump in 2001/ 2. The spike due to high glyphosate prices in 2008 is clearly evident, however since then prices have been in a trend of decline. This has continued in the first half of 2010, the average price of Chinese agrochemical exports was $2.7 per kg., down 4% from the $2.81 per kg. in 2009, with volumes up 13.5% but value only rising by 9.6%.

A key influence on the price of Chinese agrochemical exports, particularly of glyphosate, has been the tax rebate that has been available to exporting companies. The tax rebates were reduced at the end of 2007, with prices rising in 2008 assisted by the shortage of glyphosate. Rebates were reintroduced in 2009 to boost exports as industry slowed during the economic crisis, and the glyphosate sector moved into oversupply. However prices declined further during this period. In the second half of 2010 the tax rebates have been reduced again, too late to affect pricing in the first half of the year, but potentially providing a more positive outlook for the immediate future.

The impact of this on the value of the global agrochemical market is expected to be positive, despite increasing the overall cost base to farmers, particularly those in more developing markets. Whilst at present the agrochemical market is expected to enjoy a period of growth driven by crop demand in the major markets, in the longer term it is the more developing markets where the potential for volume growth in agrochemical usage remains. It is these markets where Chinese exports hold a significant market share; if this volume is satisfied at a higher price, this should drive value growth for the agrochemical market as a whole.

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