Tuesday, May 29, 2012

China Takes Restriction on Paraquat

CCM International have published the May Issue of Herbicides China News recently, focusing on paraquat restriction. Regarding whether paraquat will be restricted in China, on April 24, 2012, three Chinese governmental departments including the Ministry of Agriculture (MOA), Ministry of Industry and Information Technology (MIIT) and General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) jointly released an official announcement in response, that all paraquat SL is demanded to be withdrawn from the whole Chinese market after July 1, 2016. Accordingly, a series of relative detailed measures are mentioned in the announcement so as to back up this decision of paraquat restriction in China:

1. From April 24, 2012, China will stop approving new manufacturers of paraquat technical and formulation, stop accepting new applications of field experiment, registration and production permits for paraquat products (covering TK, SL and mixed SL), and stop sanctioning new registrations and production permits for paraquat products (covering TK, SL and mixed SL).

2. After July 1, 2014, all current registrations and production permits of paraquat SL and mixed paraquat SL will be canceled in China, except those in paraquat TK manufacturers for paraquat export to overseas market. And all products of paraquat SL are forbidden to sell and apply in China after July 1, 2016.

3. Rechecking all product labels and modifying all registrations and production permits according to the new standard. In detail, new standard demands that paraquat label should additionally include some key information such as first aid hotline and caution, and all registrations should additionally cover relative information of technical manufacturers such as manufacturer name. Thus, the unqualified new paraquat in label, registration or production permit is forbidden to come into the market after Jan. 1, 2013, and old paraquat registrations and production permits will also be canceled in the meantime. As to current paraquat products with old labels can be sold only before Dec. 31, 2013.

4. Current paraquat manufacturers in China must produce eligible paraquat products, which should be compounded with emetic, odor agents, colorant and so forth.

5. Paraquat manufacturers in China should enhance after-sale services including application instruction and first aid of poisoning. A series of protection methods in package such as thin bottleneck of paraquat bottle and medical active carbon are encouraged.

It can be observed that the restriction on paraquat of Chinese government was triggered directly by the suggestion from chemical experts of UN that paraquat dichlorid should be subject to the Prior Informed Consent (PIC) Procedure of The Rotterdam Convention, which was mentioned in March 2011. And this suggestion has already witnessed examination from Evaluation Committee of The Rotterdam Convention, and will be checked by the conference of contracting party in 2013. It means that paraquat will probably face the risk of being listed into PIC, which will impact on the circulation of paraquat in the world. (Herbicides China News 1109: Worries about paraquat aroused in China)

Coupled with the examination process in The Rotterdam Convention, China decided to restrict paraquat in domestic market, also considering its fatal poisoning trait as well as the future industrial development direction. As expected by Chinese government these years, pesticide market in China should be healthy, sustainable and people-oriented, rather than of overcapacity, stiff competitiveness and severe homogenization.

In the respect of industrial development in Chinese paraquat market, the restriction on paraquat in China will push the industrial integration to some degree, which is managed by the government currently in order to tackle overcapacity and severe homogenization in domestic pesticide market. In detail, weak small paraquat manufacturers who only aim at domestic market will be washed out, and the leading paraquat enterprises whose targets cover overseas market can stay to enjoy a potential easy circumstance. In other words, the future paraquat production in China is expected to centralize in strong paraquat players who own self-exported capacity, and the excess or weak paraquat capacity in China will be cut off in the meantime. It will be a good prospect for current Chinese paraquat industry, but the large Chinese market will also be shocked by paraquat restriction in the meantime.

In terms of current domestic paraquat market where paraquat LS is the major product category, the restriction on SL will make a large market gap if the proper substitutes can't appear in time. As a non-selective herbicide with so many years' promotion, paraquat has witnessed fast development in the past decades in China, and has been playing an increasingly important role in weed control of orchards, corn fields, no-tillage fields and mulberry fields. In accordance with CCM International's survey, the output of China's paraquat formulations has grown very fast from more than 40,000 tonnes in 2006 to nearly 80,000 tonnes in 2010, with the average annual growth rate of 20%, which is mainly attributed to the rapid growth of domestic and overseas demand for paraquat during this period.

Even though liquid paraquat formulation can be changed to non-liquid paraquat formulation, such as solid paraquat or powder-like paraquat, which haven't been listed into Chinese governmental restriction, the objective truth is that it will take lots of financial and human resources to develop the alternative formulations of paraquat in China and it will also take a long cycle to meet the outcome.

Of course, in a broader scope, other herbicides such as diquat also can be considered as substitutes. However, in consideration of characteristics about efficiency, residue, application cost and so forth, it seems that paraquat is the best of all contact-killing herbicides for the time being.

As to those potential survivors in Chinese paraquat revolution, they will also encounter large challenges in exploration of overseas market because frequent trade frictions and potential influence of The Rotterdam Convention will repress paraquat export further in a manner compared with the situation in the past. In fact, in the world, some countries such as Sweden, Denmark, Hungary and so forth are resistant to the paraquat application very much. Such resistance may upgrade if paraquat dichlorid is listed into PIC, and further impact on other original paraquat importers' decisions in the future trade.

At any rate, facing the restriction on paraquat in China, what paraquat players need to do at present is the timely strategic adjustment or effective product research. In fact, it can be said that the governmental restriction on paraquat in China is helpful indirectly for those aggressive enterprises with strong competitiveness.

(CCM International has already taken an interview about paraquat restriction in China with Syngenta, the largest paraquat manufacturer in the world. In the interview, Syngenta expressed its exclusive viewpoints. Please pay closely attention to the next issue of Herbicides China News)

Source: Herbicides China News 1205

Content of Herbicides China News 1205:
ChemChina runs asset reorganization in Sanonda
Asset exchange proceeds in Shandong Dacheng
Huapont invests in Wanquan Hongyu and Wanquan Kaidi
China takes restriction on paraquat
Jiangsu Huifeng promotes waste treatment
Noposion's net profit slipped by 25.24% in 2011
Jiangsu Repont prepares for relocation
Bispyribac-sodium registrations increase in Q1 2012
CS herbicides keep immature in China
Haloxyfop-R-methyl meets slow project in Jiangsu Weier
No acetochlor supplies in Shandong Zhongshi now
Good Harvest-Weien prepares glufosinate-ammonium and 2,4-D
Supply dynamics of pure pyridine in China of Q1 2012
Trifluralin meets price slip
… …

Herbicides China News, a monthly publication issued by CCM International on 15th of every month, provides you with the latest occurrences, exclusive analysis on the market trend as well as professional reviews on competitiveness of companies, products and relative industries in China’s herbicide industry.

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