Glyphosate Competitiveness Analysis in China

Glyphosate, a broad-spectrum herbicide, widely used to kill unwanted plants both in agriculture and in nonagricultural landscapes, has been in a leading position of herbicides in the world in the past few years; it is estimated that the global consumption of glyphosate is over 600kts at present and will increase by CAGR of over 12%.

China, now the largest production base of glyphosate technical in the world, has glyphosate capacity accounting for more than 40% of the global total. With the output expected to reach about 280kts and the export volume 250kts in 2008, China's glyphosate supply and price will have great impacts on the global market.

Since February 2007, China's glyphosate price has been surging, from the average price of about RMB34,000/t in February to RMB42,000/t as of September 2007. However, this is far from the end of the price rise. The price has kept soaring, from RMB58,000/t at the end of 2007 to the unbelievably record high, RMB95,000~100,000/t as of May 2008. But in 2006, the average price was only about RMB26,000/t.

Attracted by the huge market potential and the promising prospects of glyphosate, more and more domestic enterprises are busy either expanding their production capacities, or setting up new glyphosate production lines. The global production capacity of glyphosate is shifting to China and China has become the largest production base of glyphosate technical in the world with a capacity of 304,900t/a in 2007, accounting for more than one third of the global productivity. The output and export volume of glyphosate in China reached 187kt and 165kt respectively in 2007. It is estimated that the total capacity of glyphosate in China will reach 630,900 tonnes to the end 2008, based on the expanding plans of the glyphosate players in China.

Then why the production capacity of glyphosate technical is concentrating into China and where the competitiveness of China's glyphosate industry lies in? Whether most glyphosate producers in the domestic market undoubtedly earn considerable profit? Where its price will go next? What will influence China's glyphosate industry and how this industry will develop in the future? ...

In this report, CCM will give a detailed analysis on glyphosate industry in China to help the readers understand in depth the competitiveness of China's glyphosate industry.

Main aims of the work

• Analyse the factors influencing the competitiveness landscape of China's glyphosate industry, such as supply and demand dynamics, production pathways & technology level, raw materials supply, macro-economic situation and government policies, to understand where Chinese glyphosate competitiveness lies.
• Research systematically the different processes for glyphosate production and the current production situation of the Chinese producers in an effort to understand their production cost structures, how the different production pathways compete with each other, and how the technology will evolve.
• Set up model for glyphosate cost in China and make comparison to different cost structures of the major producers in China.
• Carry out comparison between the competitiveness of AEA pathway and IDA pathway, and analyse the competitiveness landscape of glyphosate production in China.
• Identify the key factors influencing the price of glyphosate and the internal relationship between the key factors. And then set up glyphosate price model.
• Based on the work mentioned above, make a forecast on the competitiveness of China's glyphosate in the next five years.