China’s environmental protection scrutiny on glyphosate (PMIDA), starting from May in 2013, affects the glyphosate market greatly, making glyphosate the most profitable pesticide in 2013. However, for various reasons, the qualified list of the scrutiny was not released until June 13, 2014.

Four glyphosate enterprises showed up on the list, in which Hubei Taisheng is being purchased by Xingfa Group. It is said that Xingfa Group plans to issue 94.6 million shares to Zhejiang Jinfanda, with each share worth 12.81 Yuan, to purchase its 51% shares of Taisheng. Besides, Zhenjiang Jiangnan Chemical belongs to Wynca Chemical Group, and Youshi Chemical belongs to Yangnong Chemical.

Up-to-standard Glyphosate (PMIDA) Manufacturers

The scrutiny affects China’s glyphosate market profoundly. In the beginning of 2014, China’s glyphosate market bounced back, and the transaction price increased significantly. However, the delay of the list-releasing impacted glyphosate market in a negative way, and accordingly, the transaction price of glyphosate in April and May drops (refer to the article Volume Weighted Average Price Tendency of Some Major Pesticides).

As the export of glyphosate shows, export volume to US and Brazil, whose stock from last year are sufficient, declines; but the export volume to newly emerging markets increases and makes up for the loss of those to US and Brazil in the first quarter. Hence total export volume is increasing generally. However slightly drops appeared in the second quarter. The export trend of PMIDA is just alike: export volume of the first quarter increases significantly for 50%, but slumps for 30% on year-on-year basis. The shrinking external demand is the main reason of the slumps.

The global demand for glyphosate is crucial to China’s market, whose output accounts for 60% of the global output. The South American market, one of the key markets of China’s glyphosate, shrinks for drought. Besides, Russia’s Renova Company announced its plan on glyphosate production earlier, which might also influence the glyphosate market greatly.

In the long run, environmental scrutiny is the top priority of the pesticide industry. The result of this scrutiny shows that environmental requirements are stricter than expected. If the scrutiny could be enforced strictly, it would deter the enterprises discharge pollutants secretly out of supervision, and those who operates without certificates, and those who compete illegally with too low cost. And the scrutiny would raise the threshold of the industry, improve the concentration of capacity and be helpful for forming a booming market.