Guangzhou China, May 26, 2011 - As an organophosphorus insecticide with more than 50 years' application history in China, DDVP sees supply falling behind the demand at present. It's estimated this situation will not be eased before this July as Hubei Sanonda Co., Ltd. (Hubei Sanonda) won't restart its DDVP production until June.
What causes the current supply shortage of DDVP? CCM deems that tight supply, growing demand and low inventory may be the reasons.
Underproduction of some major DDVP manufacturers is the main reason for the current tight supply of DDVP in China, which is affected by their overall relocation. Meanwhile, no newly constructed production line or capacity expansion in 2010 also leads to the tight supply.
Hubei Sanonda, the largest DDVP manufacturer in China, is still carrying on overall relocation at present and will not restart the production of DDVP until June, according to CCM's investigation. Hubei Sanonda's temporary absence will leave more than 10,000 tonnes' market volume to other DDVP manufacturers in China. According to CCM's database, the production capacity of Hubei Sanonda's DDVP was about 30,000t/a in 2010.
Besides Hubei Sanonda, the overall relocation of Nantong Jiangshan Agrochemical and Chemical Co., Ltd. (Nantong Jiangshan) also affected its DDVP production in 2011. It's reported that Nantong Jiangshan just restarted the production of DDVP early this year. Currently, the company owns DDVP production capacity of around 10,000t/a, just next to Hubei Sanonda and Shandong Dacheng Pesticide Co., Ltd. in China.
Driven by spring ploughing and the worsening rice insect pest occurrence, the demand for DDVP began to boom in March 2011 and hasn't subsided yet.
Entering spring ploughing, the demand for all kinds of pesticides increases. DDVP, as a traditional insecticide with relatively low market price (95% DDVP technical: USD2,900/t in April 2011), for sure is farmers' favorite during this spring ploughing period. Besides, the worsening rice insect pest occurrence this year also boosts the demand for DDVP to some extent, as it's an efficient insecticide used on rice to control rice plant hopper, rice stem borer and leaf folder.
As the planting season of vegetables, fruits and other crops like cotton is approaching, the demand for DDVP will continue to increase in the coming months.
Owing to the weather anomaly in 2010, no domestic DDVP manufacturer dared to mass produce DDVP in H2 2010, which directly dragged down the inventory. According to CCM's investigation, most DDVP manufacturers have no inventory of DDVP at present and some even can not receive new order in April.
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