In the first half of 2020, affected by the worldwide coronavirus pandemic, the pesticide market was quite badly affected. The upstream manufacturers were running production irregularly, where the prices of a few products rebounded.
Naturally, the results in the export market of most of the pesticide products were frustrating, due to the weak demand and average deals. The market remained slow and product prices continued to decline. In the second quarter, with the overseas pandemic outbreak, product prices began to decline, which in general appeared moving downward. At the same time, the demand for a few varieties recovered, the supply was getting tight. As the manufacturer’s production load was low, the market continued to run short and product prices soared.
In the second half of 2020, the overall market demand remained low. In the third quarter, the upstream manufacturers, distributors and downstream factories mainly ran their production as per the orders while being very careful about keeping adequate stocks. In general, even though the manufacturer’s production load picked up, the overall market demand was still weak, prices of most of the pesticide varieties declined obviously, having approached the actual production cost level. The production load of niche varieties subject to high pollution and high waste water discharge was lower and product prices remained higher as a result of the rising cost. By the end of the fourth quarter, further fall in prices of most of the product varieties was limited, forcing downstream manufacturers to consciously stock up their goods. Hence, some products touched bottom and started to rebound.
In 2020, according to the data analysis of Chinese domestic media, among the 108 pesticide technical products, prices of 16 items experienced a price rise to varying degrees, including nine herbicides, one insecticide and seven fungicides. Nineteen pesticide varieties had little price fluctuation and remained stable in general while 73 varieties declined to a different extent, and at higher percentages than during a prices rise.
2020 Pesticide Price Rise / Fall Chart
2020 Top 10 Pesticide Price Rise
Rank | Product | Accumulative increase of 2020 |
1 | Glufosinate-ammonium | 59.1% |
2 | Thiram | 50% |
3 | Glyphosate | 35.7% |
4 | Propiconazole | 33.33% |
5 | Thiophanate-methyl | 26.5% |
6 | 2,4-D | 20% |
7 | Carbendazim | 16.67% |
8 | Thiamethoxam | 16.67% |
9 | Pendimethalin | 16.27% |
10 | Trifloxystrobin | 13.72% |
2020 Top 10 Pesticide Price Fall
Rank | Product | Accumulative decrease of 2020 |
1 | Epoxiconazole | 43.75% |
2 | Prochloraz | 45.71% |
3 | Clodinafop-propargyl | 36.36% |
4 | Bifenthrin | 33.33% |
5 | Mesotrione | 29.78% |
6 | Etoxazole | 27.78% |
7 | Nitenpyram | 27.5% |
8 | Difenoconazole | 26.31% |
9 | Lufenuron | 26% |
10 | Cyhalothrin | 25% |
2021 Forecast
With the release of a series of policies in 2020, the upstream production and supply side, the distribution channel and retailers will all face changes in a new era, which will take place in respect of capacity reduction or elimination as well as production re-assessment and re-endorsement. On the other hand, there will be an opportunity to upgrade the manufacturing.
(1)Market competition will remain fierce. This is reflected by a more intensified competition between manufactures, distributors and customers as well. In 2020, there was certain degree of market speculation for some products, so the overall market expectation cannot be optimistic. Due to the price rise in the first two years, some capital funds began to flow into the pesticide industry, thus more distributors and traders stepped into the market. It can happen quite often that raw materials are monopolized by material manufacturers, resulting in an irrational price rise of some product varieties.
(2)Environmental regulatory compliance and work safety supervision will be normalized. Under the circumstance of strict environmental compliance regulation, the non-compliant manufacturers were shut down one after another in 2020. The environmental monitor activities prove that the environmental regulatory action is far from being over. In 2021, manufacturers will have to perform well in compliance with environmental and work safety requirements, which will pave the way for improvement in their business development.
(3)Most of the pesticide products are now being streamlined. After the ups and downs in 2019 and 2020, there will be no room for a further fall in prices fall for some products, as the prices have fallen to the production cost level, where some small factories have reached a point where they are finding it difficult to survive. In addition, if impacted by the environmental regulatory measures, the survival of small and medium-sized enterprises becomes an issue. On the other side, some products tend to remain stable after being streamlined, thus a further fall in prices is very limited.
(4)The prices of most of the basic raw materials will show an upward trend. This was quite obvious in the fourth quarter of 2020, when the prices of some raw materials showed a significant trend to rise. With the changes in the international market, downstream product prices are expected to rise further, driven by the costs of increased labor, financials, raw materials, and the environmental regulatory cost.
Source: AgroNews
