China’s pesticide enterprises keep zero inventory level owing to high production costs

Posted on 2017-07-14
With environmental rules becoming increasingly stringent in 2017, pesticide production has become expensive, resulting in lower rate of production within the pesticide enterprises. The inventory level of pesticide enterprises has thus reduced, which is attributable to the high cost of production.
Since the beginning of July, some pesticide enterprises have shut down production for maintenance, while the inventory of factories and distribution channels are being maintained at a low level. Prices of some product varieties have appeared to be on the rise, because of the gradual absorption of inventories and the movement of market transactions toward high-end products. The reduced volume of supply caused by the environmental compliance inspection has effectively made up for the weak demand resulting from low prices of farm product, while the competing purchasing prices for export may prop up the result of high cost of production within the industry.
Concerning herbicide , the price of glyphosate technical has fallen a bit, while glufosinate technical has been stable. However, fomesafen technical and bentazone technical are still found to be in short supply. The price of amide herbicide has appeared to rise as a result of the rising price of its intermediates. With regards to insecticide , nitenpyram technical is in a slight to medium short supply, while emamectin benzoate technical has stayed on the high side. The price of pyrethroid product is going up as a result of the impact of upstream intermediate supplies. Nicotinic insecticide has fallen back to a certain extent. Organophosphorus product is on the high side, as a result of short supply of ethyl chloride. The remaining varieties have all been relatively stable. Fungicide stayed high and generally remained in short supply. The production of part of triazole products has been affected by suspended supply of intermediates due to shutdown of production activities in Lianyungang Chemical Industrial Park.
The market demand has been slow, but all upstream and downstream factories have adopted a wait-and-see approach. Until the inventories in the market are fully absorbed, the environmental cost and increased cost of raw materials will surely trigger rise in prices, which will reflect on the cost.