Source: Bing

As the four major sterilant herbicides in the world, glyphosate, paraquat, glufosinate-ammonium and diquat have their own characteristics in killing weeds. Glyphosate is able to kill the roots of weeds completely. Paraquat is memorable because of its speed in killing weeds, which only takes it 30 minutes. Diquat is very similar with paraquat except for its narrower range of weeds when it comes to controlling. As for glufosinate-ammonium, different from glyphosate, it kills the weeds from their leaves instead of roots through plant transpiration with its initial effect time between those of paraquat and glyphosate.

In fact, glufosinate-ammonium has been living under the shadow of paraquat for more than 30 years, which began to be used in controlling conyza canadensis and goosegrass. Gradually, it was widely used in coastal areas in China. Finally, glufosinate-ammonium got its big chance to surpass paraquat after the first decade of 21^st century.

Due to the high possibility of mis-ingestion of paraquat AS, different countries and areas began to ban the sales of paraquat after 2010. South Korea and Taiwan China were the first to completely ban the sales of paraquat in Asia. It was not until 2014 that China stopped the paraquat registrations. And since July 1 2016, sales of paraquat AS have been completely banned in China.

Hebei Veyong Bio-Chemical Co., Ltd. (Hebei Veyong) and Zhejiang Yongnong Chem. Ind. Co., Ltd. (Zhejiang Yongnong) were probably the first enterprises to develop and produce glufosinate-ammonium in China. After the acceptance of glufosinate-ammonium in Guangdong Province, Hainan Province and Fujian Province, the use of glufosinate-ammonium began to expand to inland, which showed a sign of a spring of glufosinate-ammonium.

In fact, at the end of 2014, the pesticide industry in China made the same judgment on glufosinate-ammonium. It would be a spring for glufosinate-ammonium after 2015, and the ban of paraquat would be a climax for glufosinate-ammonium development in China. At the end of 2014, Hebei Veyong began its 500t/a glufosinate-ammonium project and expanded the capacity again in 2015.

A flashback on glufosinate-ammonium market in China in 2015: Due to strong demand of glufosinate-ammonium TC and limited capacity in 2015, the price of glufosinate-ammonium TC once reached RMB340,000/t and stabilized at around RMB300,000/t, which was a great time for technical producers to make money.

As for the production of glufosinate-ammonium formulations, Hebei Veyong, Zhejiang Yongnong and Lier Chemical Co., Ltd. (Lier Chemical) got their great development chances due to the abnormal supply of glufosinate-ammonium formulations from Bayer CropScience AG (Bayer CropScience). The prices of glufosinate-ammonium formulations stabilized at RMB80,000 t/a, whose profits for enterprises were much lower than that of glufosinate-ammonium TC. However, the above three enterprises were capable to compete in the pesticide market even with lower profits and that was why some formulation giants such as Shenzhen Noposion Agrochemicals Co., Ltd., Guangxi Tianyuan Biochemistry Co., Ltd. and Beijing Yoloo Pesticide Co., Ltd. stopped their pace in 2015.

Thus, there were not many glufosinate-ammonium products in the market in 2015 and the supply of glufosinate-ammonium products was not enough, which was a good opportunity for the major glufosinate-ammonium producers --- Hebei Veyong, Zhejiang Yongnong and Lier Chemical.

Most of the producers held a positive attitude toward the glufosinate-ammonium industry till the 2015 AgroChemEx held in Oct. 2015 because there was about 20,000t/a new capacity of glufosinate-ammonium to be released in the market in Aug.

Moreover, it was predicted that there was at least 10,000t/a new capacity of glufosinate-ammonium in the market in 2016 with the expected total capacity reached 50,000t/a in 2017. So why do insiders still have a good expectation on glufosinate-ammonium industry? It was mainly because of the huge market left by the ban of paraquat.

Paraquat AS, which had been in China’s pesticide market for 32 years, finally exited the market in July 1 2016. With its formulation sales of over 100,000 t/a in China, paraquat captured a huge market share. As for the global market, the sales of paraquat formulation were over 300,000 tonnes in 2015.

With the 400,000 tonne of paraquat formulation left by the exit of paraquat, it was believed that glufosinate-ammonium would have its biggest chance to develop.

Thus, many of the pesticide producers all tried to capture the market and believed that glufosinate-ammonium was the only substitute for paraquat.

However, the development of glufosinate-ammonium didn’t go as what it was expected and even fell into a long decline, which was mainly caused by the return of Bayer CropScience.

In Jan. 2016, Basta (glufosinate-ammonium SL 18%), Bayer CropScience’s product, returned to the market after the tight supply in China’s market. The price of Basta even declined to RMB80,000-100,000/t from RMB120,000-140,000/t in Jan. 26 2016. In the meanwhile, Bayer CropScience also announced that it would guarantee the supply in the China’s market in 2016.

What happened next? Zhejiang Yongnong, Lier Chemical and Hebei Veyong all followed the trend and decreased the price of glufosinate-ammonium products. The price of Lier Chemical glufosinate-ammonium product declined to RMB70,000-75,000/t from RMB100,000/t. So did the price of Zhejiang Yongnong glufosinate-ammonium product. As for Hebei Veyong, its glufosinate-ammonium product fell to RMB75,000-80,000/t.

The controversy whether the price decline was the market discipline or war price has not stopped since the beginning of 2016.

In fact, the first round of decline in Jan. – Mar. 2016 was reasonable because the price of glufosinate-ammonium formulation was much higher than that of paraquat which increased the cost for farmers. The decline on glufosinate-ammonium price would make it easier for farmers to accept this substitute of paraquat.

However, the price kept falling in April in 2016, from RMB58,000/t to RMB52,000/t, then to RMB43,000/t and in July, it even fell to RMB295,000/t.

In only a one-year time, glufosinate-ammonium has been through its up and down. The future of glufosinate-ammonium is still changeable.

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