(1888PressRelease)
May 14, 2009 - Meanwhile, the glyphosate is the major export variety of Chinese technical. From 2006 to April 2008, the glyphosate price was rising gradually. Due to the successive increases of the global crude oil price in the previous time, the advantages of the biological energy were showed fully. Besides, the global planting areas of the glyphosate resistance genetically modified crops were increased.
Also, Monsanto, the world’s largest glyphosate manufacturer, cut down the yields, leading to the mass international demands turn to China. Chinese glyphosate manufacturers went into full production, which was still unable to meet the market demands and the glyphosate price was growing successively. The technical price was jumping from 4,000 USD in the end of 2006 to the peak of 13 thousand USD per ton in April 2008.
Chinese glyphosate enterprises were in the profiteering times, but from May 2008, the glyphosate price began to drop. Under the influences of international financial crisis, the international pesticide market entered the decline passage, especially the reduction in the glyphosate price. In the beginning of 2009, the bottom glyphosate price was 3,100 USD per ton.
In 2008, the glyphosate yield capacity in China had passed 500 thousand tons, which had reached to 600 thousand tons in the first quarter of 2009.
The prices of the oil, natural gas and coal etc are the most important factor affecting the glyphosate price. Meanwhile, the supplies and demands are also an important element affecting the glyphosate price.
From 2007 to 2008, the glyphosate price rose and dropped suddenly and sharply, leading to the operation achievement fluctuation of the listed companies, such as Zhejiang Wynca Chemical Group Co., Ltd, Nantong Jiangshan Agrochemical & Chemical Limited Liability Co, Anhui Huaxing Chemical Industry Co., Ltd, Jiangsu Yangnong Chemical Co., Ltd and Zhejiang Shenghua Bilk Biology Co., Ltd etc.
In the first quarter of 2009, the glyphosate price stopped dropping and went up again, which had been the bottom low. The expected currency de-valuation in the major Europe, America and Japan was intense. The prices of the oil, natural gas and coal etc would increase. Under such influences, the demands for the biological energy would be increased as well as the glyphosate price increase driven by the demands and costs.
From long run, there is a promising prosperity for the development of the biological energy industry, and the planting areas of the glyphosate resistance genetically modified crops will continue to increase. It is predicted that the demand volumes and price will show the shock upstream tendency.
In China, the glyphosate industry is low in the entry conditions, but fierce in the industry competition. Ordinarily, the gross profit rate is about 15%. Owning to a batch of newly built glyphosate project, the yield capacity of Chinese glyphosate industry has accounted for over 60% of the world’s yield capacity, surplus in the yield capacity.
At present, the largest glyphosate yield capacity company in China is Zhejiang Wynca Chemical Group Co., Ltd, which was about 80 thousand tons in the beginning of 2009.
The glyphosate-methyl chloride-organosilicon system of Zhejiang Wynca Chemical Group Co., Ltd makes the company have the highest profit rate of glyphosate and organosilicon in China. Besides, the glyphosate yield capacity of the company is still expanding. It is predicted that the first cycle 25-thousand-ton glyphosate project in process will be in operation in 2010.
In 2008, there occurred the sharp growth of the glyphosate price, rising from the 8.8 USD in the beginning of year to the highest of 15 USD per kilogram, which not only attracted attentions to Zhejiang Wynca Chemical Group Co., Ltd, but also made it gain more profits. The annual report of 2008 showed that the total operation revenues were increased by 88.59% year on year as well as the net profits of 239.73%.
Restrained from the environmental protection policies, there is limited extension space for the global glyphosate yield capacity. About 80% Chinese glyphosate products are used to export because of the fewer herbicide uses in Chinese agriculture.
On 17th November, 2008, Ministry of Finance of P. R. of China and State Administration of Taxation announced that the glyphosate export tax rebate rate was enhanced from 5% to 9% from 1st December, 2008.
The increase of the glyphosate export tax rebate rate will make more space for the reduction of the glyphosate export price. It is predicted that more global glyphosate orders will turn to China. Many Chinese glyphosate enterprises, under the influences of international financial crisis, are willing to operate and expand the yield capacity even though the slight profits. Apart from the 50-thousand-ton yield capacity extension plan of Zhejiang Wynca Chemical Group Co., Ltd, Jiangsu Yangnong Chemical Co., Ltd, JingMa Chemicals Co., Ltd and Anhui Huaxing Chemical Industry Co., Ltd are all planning to expand the glyphosate yield capacity, ranging from 20 to 30 thousand tons. It is predicted that these projects will be in operation concentrate in 2010.
In April 2009, it was said that Chongqing Sanxia Paints Co., Ltd was planning to construct the glyphosate project capable of producing 100 thousand tons annually. The company would first construct the 50-thousand-ton aminoacetic acid project, producing the raw materials for the glyphosate project capable of producing 100 thousand tons annually. If the rumor is true, the glyphosate yield capacity will probably reach to 900 thousand tons in 2010, accounting for 70% of the world’s yield capacity.
In recent years, the glyphosate yield capacity in China was expanded rapidly, but the domestic demands slowed down, the annual technical demands were only about 50 thousand tons, leading to the newly added yield capacity rely on the export market. Under the circumstances of yield capacity surplus, many Chinese glyphosate enterprises will have to increase their sales volumes through cutting down the export price, inevitably resulting in the international trade friction. It is predicted that Chinese glyphosate export enterprises will still face the antidumping investigations in the international market occasionally in the future.
Source: China Research and Intelligence
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