It is understood that since the fourth quarter of 2010, pesticide prices have risen. According to statistics from the China Pesticide Industry Association's Pesticide Market Information Center, in the fourth quarter of 2010, although the value of pesticide sales was off-season, the prices of bulk conventional pesticides were 10% to 20% higher than in the fourth quarter of 2009. Among them, prices for bulk conventional pesticides accounted for 70% to 80%. However, the price increase does not seem to have changed the pessimism of the pesticide industry. “Despite the increase in pesticide prices, the profitability of the industry has not improved,†said Zhang Weinong, a pesticide market information center. “The driving factors behind rising pesticide prices include rising prices of raw materials, increased labor costs, and rising costs of 'three wastes'. It is expected that the price of pesticides will increase slightly in 2011, but it will not repeat the market price soaring before the financial crisis in 2008."
It is understood that the major cause of the industry's continuous encounter with the "small year" dilemma is a serious overcapacity. According to data provided by industry sources, the number of pesticide companies approved by the Ministry of Agriculture is about 2,400, and the actual number of enterprises may be more than 4,000. From January to October 2010, domestic pesticide production reached 2.235 million tons, close to 2009 levels. At the end of November 2010, the inventory of pesticide production enterprises reached 9.99 billion yuan, a year-on-year increase of 4.23%.
In addition, the slow growth of the use of pesticides is also one of the reasons for the “small yearsâ€. CIBC Research Investment Researcher Liang Bin said: “The rapid growth period of the pesticide industry has passed. The previous round of growth came from increased agricultural sown area, increased drug resistance resulting in increased drug use, pesticide replacement, and herbicide promotion. The current herbicides have been Large-scale promotion, and the new pesticide species is difficult to appear in the short term, under normal climate conditions, the growth in demand for pesticides is limited.â€
International trade barriers also cause "small years" in pesticides. In recent years, domestic glyphosate companies have also frequently encountered anti-dumping from abroad. Countries and regions including EU, the United States, Australia, Brazil, and Argentina have all submitted anti-dumping investigations to China's glyphosate companies. Just in the past 2010, Brazil, the United States and other countries submitted anti-dumping investigations on Chinese glyphosate.
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