The industry chain of plant protection products can be divided into four links: “raw materials – intermediates – original drugs – preparations”. Upstream is the petroleum/chemical industry, which provides raw materials for plant protection products, mainly inorganic chemical raw materials such as yellow phosphorus and liquid chlorine, and basic organic chemical raw materials such as methanol and “tribenzene”.
The midstream industry mainly includes intermediates and active drugs. Intermediates are the basis for the production of active drugs, and different active drugs require different intermediates in the production process, which can be divided into fluorine-containing intermediates, cyano-containing intermediates, and heterocyclic intermediates. The original drug is the final product composed of active ingredients and impurities obtained in the process of pesticide production. According to the control object, it can be divided into herbicides, insecticides, fungicides and so on.
Downstream industries mainly cover pharmaceutical products. Due to the insoluble in water and the high content of active ingredients, the vast majority of active drugs can not be used directly, need to add appropriate additives (such as solvents, emulsifiers, dispersants, etc.) processed into different dosage forms, applied in agriculture, forestry, animal husbandry, health and other fields.
01 Development status of pesticide intermediates market in China
Pesticide intermediates industry is in the middle of the pesticide industry chain, multinational companies control the front-end innovative pesticide research and development and sales channels of terminal preparations, most of the intermediates and active agents choose to purchase from China, India and other countries, China and India have become the main production places of pesticide intermediates and active agents in the world.
The output of pesticide intermediates in China maintained a low growth rate, with an average annual growth rate of 1.4% from 2014 to 2023. China’s pesticide intermediates enterprises are greatly affected by the policy, and the overall capacity utilization rate is low. The pesticide intermediates produced in China can basically meet the needs of the pesticide industry, but some intermediates still need to be imported. Some of them are produced in China, but the quantity or quality cannot meet the production requirements; The other part of China is not yet able to produce.
Since 2017, the demand for pesticide intermediates in China has dropped significantly, and the decline in market size is less than the decline in demand. Mainly due to the implementation of the zero-growth action of pesticides and fertilizers, the application amount of pesticides and the production of raw drugs in China have been greatly reduced, and the demand for pesticide intermediates has also been greatly reduced. At the same time, affected by environmental protection restrictions, the market price of most pesticide intermediates rose rapidly in 2017, making the industry market size generally stable, and the market price gradually fell from 2018 to 2019 as the supply gradually returned to normal. According to statistics, as of 2022, China’s pesticide intermediates market size is about 68.78 billion yuan, and the average market price is about 17,500 yuan/ton.
02 Development status of pesticide preparation market in China
The profit distribution of pesticide industry chain presents the characteristics of “smile curve” : preparations account for 50%, intermediates 20%, original drugs 15%, services 15%, and terminal preparations sales are the core profit link, occupying an absolute position in the profit distribution of pesticide industry chain. Compared with the production of the original drug, which emphasizes synthetic technology and cost control, the preparation is closer to the terminal market, and the ability of the enterprise is more comprehensive.
In addition to technology research and development, the field of preparations also emphasizes channels and brand building, after-sales service, and more diversified competition dimensions and higher added value. Due to the implementation of the zero-growth action of pesticide and fertilizer, the demand for pesticide preparations in China has continued to decline, which has directly affected the market size and development speed of the industry. At present, China’s shrinking demand has led to the prominent problem of overcapacity, which has further intensified market competition and affected the profitability of enterprises and the development of the industry.
China’s export quantity and amount of pesticide preparations are much higher than imports, forming a trade surplus. From 2020 to 2022, the export of China’s pesticide preparations will adjust, adapt and improve in the ups and downs. In 2023, China’s import amount of pesticide preparations was 974 million US dollars, an increase of 1.94% over the same period last year, and the main import source countries were Indonesia, Japan and Germany. Exports amounted to $8.087 billion, down 27.21% year on year, with the main export destinations being Brazil (18.3%), Australia and the United States. 70%-80% of China’s pesticide production is exported, the inventory in the international market is to be digested, and the price of superimposed pesticide products has declined sharply, which is the main reason for the decline in the export amount of pesticide preparations in 2023.
Post time: Jul-22-2024