Since mid-2014, the international price of
crude oil witnessed sharp falls, from over USD100/bbl in June to below
USD50/bbl currently, a drop of 50%. However, the falling price of crude oil has
little effect on the price of China’s pesticide recently.
Wang Jianwo, secretary-general of the Crop
Protection Industry Association of Hunan Province.
Since June 2014, the international price of
crude oil began to fall, decreasing from over USD100/bbl in June to less than
USD50/bbl currently, a drop of 50%. At present, the international crude oil
price is hovering between USD45/bbl and USD55/bbl. Nevertheless, the price up
and down of crude oil makes no difference to the pesticide price since crude
oil price is not the core factors influencing the pesticide market.
According to the previous data, the high
crude oil price brought little impact to pesticide and its intermediate
industries. The impacts only take effect when the crude oil price begins to
rise, since the price fluctuation of downstream fine chemicals always lags
behind that of the crude oil price. Therefore, the price fluctuation of crude
oil has a negligible effect on the market price of pesticide.
Firstly, pesticide as the end product in
petrochemical deep-processing industry, its price is positively correlated to
the crude oil price. But since the pesticide and its intermediate industries
consume less crude oil in production, the falling price of crude oil may not
good for the pesticide industry.
Secondly, thanks to the strengthening
market demand and price rises in downstream market, the price growth rates of
pesticides especially some basic pesticide intermediates can offset the falling
crude oil price. That is to say, the fall in crude oil price can be ignored
compared to the rising price of pesticide intermediates.
As a whole, the core factors influencing
pesticide price and enterprises profits include market demand, pesticide
performances and technology level of equipment, not only the price of raw
material.
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