Will pesticides continue to rise in 2018? In 2017, the most demanding varieties of pesticides include phoxim, chlorpyrifos, beta-cypermethrin, cyfluthrin, imidacloprid, chlorothalonil, copper hydroxide, avermectin, carbendazim, pentachloronitro Benzene, alachlor, acetochlor, glyphosate and so on. It is expected that the prices of pesticides, fungicides and herbicides will trend upward overall in 2018.
The price of pesticides in 2017 rose sharply. For herbicides, as of the end of 2017, the price of glyphosate rose by more than 60% from the lowest price of RMB 19,000/ton at the end of June. In terms of pesticides, as of the end of the year, the price of imidacloprid rose to 250,000 yuan/ton, up 78.6% from the beginning of the year. Due to the pressure of environmental protection, many companies are unable to start construction and manufacturers are not active. The supply of raw drugs is in short supply, and the future market for raw drugs is still very tight. It is expected that the price increase will continue until May 2018, which will lead to spring retail prices of pesticides.
One of the reasons for the increase is that in April and August of 2017, two central environmental inspections led to the limited start-up of some pesticide production companies and the cautious supply of goods. As a result of market speculation, traders and manufacturers raised the price of raw drugs, leading to Most pesticide products continue to rise in price. Second, due to the rise in the prices of basic chemical raw materials in the upstream areas and the continuous increase in the prices of pesticide intermediates, the cost of pesticide production companies has continued to increase. Under tight supply conditions and increasing cost pressures, manufacturers have been forced to increase prices of pesticide products.
In addition to the above reasons, the newly revised “Pesticide Management Regulations” will come into effect on June 1, 2017, including the pesticide management system, registration system, production management system, business management system, definition of counterfeit and inferior pesticides, recycling of pesticides, and Illegal penalties and other major changes were made to promote the standardized operation of manufacturers and distributors, ensure the safety of pesticides used by farmers, and, to a certain extent, also affect the cost of pesticides.
In 2017, the utilization rate of pesticides for rice, corn and wheat was 38.8%, which was 2.2 percentage points higher than that of 2015. The utilization rate of fertilizers and pesticides in the three major food crops has increased steadily, and the goal of zero growth in the use of chemical fertilizers and pesticides by 2020 has been achieved three years ahead of schedule.
According to estimates, the utilization rate of pesticides increased by 2.2 percentage points, which is equivalent to reducing the use of pesticides by 30,000 tons and reducing production investment by about 1.2 billion yuan. Through the reduction of pesticides, a large number of green brands have been created. In particular, green prevention and control technologies such as ecological control, biological control, and physical prevention and control were adopted to reduce pesticide residues, improve the environment for the production of agricultural products, and ensure the quality and safety of agricultural products.
Under the background of zero growth of pesticides and continued rise in pesticide prices, agrochemical products are also facing a new round of supply-side adjustments, and the competitive landscape of “survival of the fittest” will further highlight its effectiveness, and pesticide prices may further increase.
First of all, from the perspective of raw drug prices, the pesticide market after the Spring Festival will usher in the peak season for purchasing in 2018. Under the current situation where the supply of goods in the market has not been fully alleviated, the prices of pesticide products may have a further surge. Second, from the perspective of industry concentration, the effective production capacity of most products is increasingly concentrated on large-scale production enterprises, especially those with sound environmental protection facilities. Small and backward companies will face the possibility of elimination. Finally, under the trend of international mergers and acquisitions, the pace of domestic mergers and acquisitions is expected to accelerate, the market is facing a re-division and reshuffle.