However, the price was still low when compared with the same period last year.

It's worth noting that, although suppliers are actively pushing up the price, glyphosate purchasers still adopt a wait-and-see attitude and keep being cautious about purchasing, due to the previous long-term price drop, resulting in small inventories of glyphosate and related products.

                                          Ex-works price of glyphosate 95% TC in China, Oct. 2015-Oct. 2016

So what's the reason for this constantly raising price of glyphosate and for how long will it keep raising?

Positive factors

1. The peak sale season for glyphosate is coming, thus all enterprises hope to make good achievements. Particularly, after experiencing market depression for long, many enterprises are at loss and are in an urgent need of raising prices to relieve these losses. "Some domestic glyphosate enterprises have already received enquiries from the African market," disclosed an industry insider.

2. Rising costs of raw materials and transportation to some extent strengthen the raise of glyphosate's prices. Currently, the prices of raw materials for glyphsoate, namely glycine, yellow phosphorus, methanol, etc. showed different degrees of rises and, on 21 Sept., the Management Regulations on Overloaded Transportation Vehicle issued by China's Ministry of Transport and Ministry of Public Security was implemented, which pushed up the transportation costs of bulk commodities.

3. Environmental pressure forced enterprises to increase prices. Affected by the 2016 G20 summit held in Sept., glyphosate enterprises in Zhejiang Province and the surrounding areas significantly reduced the operating rate, leading to a fall in the market supply.

On 19 Sept., the 2016 Glyphosate Collaborative Group Work Conference was held in Beijing, during which the first draft of the Glyphosate Industry Hazardous Wastes Disposal and Treatment Control Technical Specifications (Outline) was explained and it revealed how the costs of waste water disposal would further increase the production costs of glyphosate.

In addition, there are rumors that the second batch of environmental inspection team will be stationed in major glyphosate producing provinces like Sichuan and Hubei. When the time comes, the production of enterprises within these areas may be affected, and therefore market supply would be largely reduced.

4. Given the depressed market and environmental pressure, most of medium- and small-scale glyphosate enterprises still suspended production for maintenance and there are not many orders that impel them to resume production.

Some industry insiders are still optimistic about the price rise of glyphosate – they believe that the price will stand still or will keep rising in the short term. The AgroChemEx 2016 will be held in Shanghai in 16-18 Oct., which will also boost the transaction and price of glyphosate.

Nevertheless, some insiders hold different views:

Firstly, although glyphosate enterprises are bearing environmental pressure, there are no new environmental policies issued for the glyphosate industry. In other words, large glyphosate enterprises still maintain high operating rate, and market supply won't be greatly reduced.

Secondly, the price rises in Sept. boosted the operating rate of some enterprises and increased market supply, which also indicated that the price support in the coming future was lessened to some extent.

Thirdly, according to CCM's research, Jan.-July 2016 witnessed a YoY rise in China's export volume of glyphosate, but some industry insiders are worried that the figure is likely to slide in Aug.-Dec., given the present slack in the global demand.

This article comes from Glyphosate China Monthly Report 1610, CCM