China’s tight environmental regulations let few glyphosate enterprises shine 05-07-2018

While most of China's agrochemicals enterprises are running on low production rate, due to the enforced environmental protection measurements by the government, the ones with upgraded technology are the winners. Yangnong Chemical, one of the leading glyphosate producers in China, was running full capacity in recent years, able to run ahead of the less-advanced competition. 


In 2017, due to the impact of China’s environmental protection policies, production of many chemical raw material enterprises was limited, resulting in a shortage of many pesticide chemical raw materials. As a result, raw material prices had been rising, especially in H2 2017. Rising raw material prices brought raw material cost pressures to the production of pesticides, pushing up the market prices of many pesticides in 2017, according to market intelligence firm CCM. 

Overall, affected by environmental protection policies and two central environmental protection inspections in April and August 2017, production of some pesticide producers was restricted, leading to tight supply. Difference between quoted prices and transaction prices of pesticides in H2 2017 was much higher than that in H1 2017. Hype and bid-up sent the prices out of control, most domestic pesticide prices showed uptrends and prices of some pesticide products skyrocketed in H2 2017. 

The glyphosate producers with the highest standards of production technologies are easily the winners in the environmental pressure, as they are not affected by forced production suspensions. One of this big winner is Yangnong Chemical, which could achieve a utilization rate of 100%, a production that barely any other enterprise could witness. Hence, the company was getting more popular for international glyphosate buyers, as the supply remained stable and predictable. 

According to CCM’s research, Yangnong Chemical went into full-load production with a capacity utilisation rate of 100% in 2017, thanks to larger environmental input and better pollution control than its peers. 

Last year, affected by environmental inspections, many agrochemical enterprises suspended or cut production, leading to insufficient market supply. Fortunately, depending on larger environmental input and better pollution control than peers, as well as strong product demand, Yangnong Chemical realised full-load production.

Yangnong Chemical is one of leading glyphosate producers in China, IDA process glyphosate capacity given at 30,000 t/a. The glyphosate production line ran at 100% in both, 2016 and 2017. 

In 2017, glycine producers suffered from a declining operating rate, resulting in short supply and the high price of glycine. As a result, glycine-process glyphosate operating rate was also restrained. Glyphosate price was eventually pushed up. In this context, IDA-process glyphosate producers and those who have their own glycine production equipment have advantages. 

Recently, 19 pesticide enterprises were accredited as National Enterprise Technology Centres in 2017–2018 by the National Development and Reform Commission (NDRC). Many leading glyphosate enterprises, such as Yangnong Chemical, but also Hubei Xingfa and Zhejiang Wynca are on the list. 

The government will provide preferential policies for the 19 enterprises on the list to encourage self-dependent innovations. The National Enterprise Technology Centre is set to recognise enterprises in the main industries of the national economy, which have strong capability in technical innovation and make the excellent performance as well as serve as a kind of role model. The NDRC, the Ministry of Science and Technology, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation take the responsibility to identify the enterprises, and the NDRC takes the lead to guide the construction of the centres and the work related to identification. 

About the article

The information for this article comes from CCM, China’s leading market intelligence provider for the fields of agriculture, chemicals, food and feed. 


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