Recently,
the Chinese government has been closely monitoring the price variations in the
import commodities, such as milk powders and medicines, with a view to protect
the common citizen against unfair prices. In recent years, the price of
imported pesticide has risen abnormally. Will this continuing price rise face
any policy risk?
Price
variations have an influence not only on people's life, but also on national
stability. Thus, the government has the responsibility to take steps against
price rise when the price has risen at unacceptable rates. Over the past years,
the prices of imported commodities, such as milk powders, cars and medicines
have soared leaving consumers puzzled. Finally, the Chinese government had to
take steps against price rise, giving most of the foreign companies a severe
hit.
Lately,
the market share of imported pesticide is on the rise, so does the price. As a
result, price rise of imported pesticide has become farmers' burden. Under this
situation, if the price of imported pesticides increases again, will the
government try to regulate?
It
is believed that the government of China would not take any measure for price
control of these imported pesticides in the near future.
Firstly,
compared with the industries mentioned above, domestic pesticide market is very
small, whose annual sale is only around USD8.1 billion to USD9.8 billion. It's
quite reasonable, pesticides are a kind of product specifically for specific
people--the farmers, and the small aggregate demand determines its low impact
on people's daily life in a short term.
Additionally,
domestic pesticides would be the back-up choice to hit back the rising price of
imported pesticide. China is the biggest producer of pesticide in the world. If
farmers don't like imported products, they can choose the much cheaper homemade
products.
On
the other hand, the imported pesticide is well received by farmers. Presently,
the market share of domestic pesticide has been declining year by year;
conversely, the amount of the imported pesticides is rising. According to the
data from China Customs, totally 35,639 tonnes of pesticides have been imported
from January to May in 2013, up by 6.9% compared to the same period in 2012.
Even though the price of imported pesticide is rising, some farmers or agencies
prefer the high price imported pesticide rather than the domestic pesticide,
the imported pesticide is accepted by more and more farmers at the moment.
There
are multiple reasons for this. Firstly, the imported pesticides are believed to
be more environmentally friendly and the low toxicity and pollution-free
features make them easily accepted by the market. Besides, the most important point
is that the imported pesticides show farmers better performance than domestic
products, which can help farmers to lower the labor cost and to ensure the
output.
However,
the farmers suffer from the high prices. The high prices of these imported pesticides
will directly increase their planting cost and decrease the profits. The
continued price rise of imported pesticides will ultimately make the consumers
pay higher prices for agricultural products. Furthermore, the continued high
price of pesticide may reduce the farmers' enthusiasm.
So,
if the price rises unfairly, it is possible that the Chinese government will
take measures to bring imported pesticide prices under control. Threat to the
national food security is the last thing the Chinese government wants to see.
In
fact, many local governments issued policies to crack down the high price of
rice seed, when some companies raised their rice seed prices. This may be
repeated in pesticides industry as well.
Shanghai port prices of major
insecticides in August 2013
Ex-works prices of major insecticides in
August 2013
FOB Shanghai prices of major
insecticides in August 2013
Shandong plans to build 2 new pesticides
projects
Output of insecticide increases by 2.20%
YOY in June 2013
China's imidacloprid export continues to
surge in the first four months this year
Will high price imported pesticide face
any policy risk?
Jiangsu Changqing achieves good
operating performance in H1 2013
Full implementation of new pesticide
policy in Hainan Province finally comes true
Guangzhou Lonkey to buy 25% shares of
Qiheng Agro-chemical
Brief registration overview of China's
microbial insecticides
Total profit of China's chemical
pesticide industry up 48.2% YOY in Jan.-May 2013
Noposion to delay resumption of trading
Lanfeng Biochemical to establish an
import and export company
Huifeng Agrochemical's net profit up
54.52% year on year in H1 2013
Lier Chemical enjoys double-digit rise
in revenue and net profit in H1 2013
DuPont takes multi-product strategy for
chlorantraniliprole in China
China to strengthen management of
neonicotinoid insecticides
Hubei Jinhaichao firstly achieves the
registration of molluscacide—TDS
4 enterprise with pesticides business
get into 2013 China’s top 500 enterprises
Indoxacarb TK is registered twice in
July 2013
Sinochem agro actively expands overseas
pesticides market
Most insecticides show price uptrend in
H1 2013
Major rice pests' occurrence dynamics
and trend analysis in 2013
Insecticides China
News, a
monthly publication issued by CCM on 10th, provides the latest and
influential analysis on insecticide industry. Major contents include special
report, company dynamics, market dynamics, supply and demand, price analysis, policy,
raw material and intermediate.
CCM is dedicated to market research in China
Guangzhou
CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
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