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At the beginning of this year, the export situation of pesticides was very good. The growth in export value was much higher than the increase in exports. The performance was gratifying. Li Zhengxian, vice chairman of the China Pesticide Association, told reporters that from January to June this year, the country’s physical exports of pesticide products reached 288,000 tons, an increase of 16.4% year-on-year. At the same time, the export value increased by 84.8%. The export of glyphosate, the leading product of pesticide exports, increased by 13.3% in the first half of the year, and the export value increased by 112.6%.
Glyphosate is the largest pesticide species in terms of both domestic production and export volume. Due to the increase in the area under cultivation of genetically modified crops and the prospects for the development of biofuels, glyphosate products have been rising in price since the beginning of last year. It is understood that the highest price of glyphosate had reached 110,000 yuan per ton in the first quarter of this year.
From the beginning of April this year, the price of glyphosate has shown signs of falling, and prices have fallen sharply before and after August. The current long-term contract price is approximately 50,000 yuan per ton, and the spot price is lower than the minimum of 40,000 yuan per ton. Yuan has fallen to the cost price. The drop in the price of glyphosate is directly related to the rapid expansion of domestic production of glyphosate in recent years. It is understood that the high price attraction of last year and the first few months of this year, together with the low threshold for the production of glyphosate, led many companies to invest in the construction and expansion of the glyphosate plant. In 2006, the domestic production of glyphosate was close to 200,000 tons. At present, the domestic production capacity has exceeded 300,000 tons, and this year, domestic production of glyphosate will increase by about 100,000 tons soon.
Li Zhengxian, deputy director of the company, told reporters that the rapid decline in the prices of leading export products will indeed bring about a decline in the growth rate of pesticide exports, but this should be seen as a cyclical adjustment of the market. Changes in the supply relationship have brought product prices from a distorted state back to a calm and rational state. The market competition brought about by this change is an opportunity for companies with large scale, strong capabilities, and advanced technology to stand firm and merge and integrate. For some enterprises with low technological level and weak strength, they may stop production or even be eliminated. Speaking of the current impact of the dilemma of glyphosate on the export of pesticides throughout the year, Li Zhengxian believes that although the impact is large at present, from a year-round average, China's pesticide exports will maintain a certain growth rate this year.
Domestic pesticide industry gradually feel pressure
In the first half of this year, the export of pesticide products increased significantly. With the price of export leading products represented by glyphosate rapidly falling from the top, the pressure on China's pesticide industry has increased. However, industry insiders believe that this will be a good opportunity for the industry to adjust. At the same time, despite the fact that prices have affected the export status of pesticides, China’s pesticides will still maintain a certain growth over the previous year.