Industrial News
my country pesticide industry breaks through on the road
1. Steady growth of the global pesticide market
The demand for pesticides is rigid and indispensable to ensure the continuous growth of human food demand. In 2018, the global pesticide market size was 57.56 billion U.S. dollars (+6%), of which herbicides were 24.61 billion U.S. dollars (increased by 5.9%, accounting for 42.7%), fungicides were 16.32 billion U.S. dollars (increased by 4.7%, accounting for 28.4%), insecticides Agents 14.55 billion US dollars (up 7.6%, accounting for 25.3%, but the growth rate in the past five years is 0.2%), Asia Pacific (increasing 7.2%, accounting for 30.4%), Latin America (increasing 11.1%, accounting for 24.7%), Europe (down 3%, accounting for 20.8%) occupies the main market, Brazil, the United States, China, Japan, and India occupy the TOP5, which is expected to reach 66.7 billion US dollars in 2023, with a five-year CAGR of 3%.
High technology, environmental protection, and registration barriers. Continue to pursue high-efficiency, low-toxicity, and environmentally friendly pesticides. Currently, there are more than 40 categories, 600 active ingredients, registered sales systems, and strict supervision. The development of new active ingredients has become more difficult (one in 160,000), the investment cost is high (average US$300 million), and the development and sales cycle has been lengthened (more than 11 years), which has also greatly increased industry barriers.
2. my country's pesticides are large but not strong, and they are breaking through on the road
Rapid growth, an important part of the global industrial chain: my country's pesticide industry started late, but it has become the world's largest pesticide producer, with an export ratio of more than 70%, and the third largest consumer.
Environmental protection and safety supervision enter the park, and the industry is upgraded. From January to May 2019, the output of pesticide technical materials was 866,000 tons, -21.9% year-on-year, and the export was 670,000 tons, with an export ratio of 77.4%. my country's pesticide industry has a prominent problem of small fragmentation and insufficient research and development capabilities. There is still a big gap between the development goals set by the "13th Five-Year Development Plan for the Pesticide Industry" and the "Petrochemical and Chemical Industry Development Plan (2016-2020)". On March 21, 2019, Xiangshui was a particularly serious accident. Jiangsu Province, a major pesticide province, issued the "Jiangsu Province Chemical Industry Improvement Plan", catalyzing the acceleration of industry upgrading.
In 2018, my country’s pesticide exports were 8.07 billion U.S. dollars, of which 1.31 billion U.S. dollars were exported to the United States. Currently, the pesticide products listed on the list of additional tariffs are about 300 million U.S. dollars. In the short term, the export data is expected to be poor. However, due to the strict registration system adopted by various countries for the pesticide industry, re-export trade and the change of suppliers face great obstacles. The division of labor in the global pesticide industry chain has basically taken shape, and the Chinese original drug market cannot be completely replaced within 2-3 years. In the early stage, the United States removed glyphosate, glufosinate, and dicamba from the US$200 billion tariff list.
3. Industry catalytic factors
1. The overall valuation of the pesticide industry is low in ten years.
2. The second round of environmental protection inspections will be launched in 2019 and will end in 2021. In 2022, a "look back" will be launched and the scope of inspections will be further expanded.
3. In 2017, the fixed asset investment in pesticide manufacturing was 44.348 billion yuan, a year-on-year decrease of 13.48, and it was concentrated on the top.
4. The oil price center moves upward.
5. Since 2011, agricultural products have experienced more than eight years of sluggishness. In 2019, the co-consumption ratio of corn, soybeans, cotton sugar, and rapeseed oil was significantly lower than the average value of the past ten years. It has recently benefited from the expectation of easing global liquidity, Sino-US trade friction, etc. Influenced by factors, soybean and corn prices are strong.
6. Pesticides account for a relatively small proportion of the total cost of crops (less than 5%) and are not sensitive to prices. 7. Catalysis of "yao moth" and other pests and diseases.
Four, investment advice
Although the pesticide price index has continued to decline since 2019, considering the low industry valuation, high environmental protection, technology, parks, registration barriers, industrial upgrades, increased concentration, strong supply-side logic, superimposed demand-side agricultural product prices, and subsequent pesticides The price is expected to be repaired.
The demand for pesticides is rigid and indispensable to ensure the continuous growth of human food demand. In 2018, the global pesticide market size was 57.56 billion U.S. dollars (+6%), of which herbicides were 24.61 billion U.S. dollars (increased by 5.9%, accounting for 42.7%), fungicides were 16.32 billion U.S. dollars (increased by 4.7%, accounting for 28.4%), insecticides Agents 14.55 billion US dollars (up 7.6%, accounting for 25.3%, but the growth rate in the past five years is 0.2%), Asia Pacific (increasing 7.2%, accounting for 30.4%), Latin America (increasing 11.1%, accounting for 24.7%), Europe (down 3%, accounting for 20.8%) occupies the main market, Brazil, the United States, China, Japan, and India occupy the TOP5, which is expected to reach 66.7 billion US dollars in 2023, with a five-year CAGR of 3%.
High technology, environmental protection, and registration barriers. Continue to pursue high-efficiency, low-toxicity, and environmentally friendly pesticides. Currently, there are more than 40 categories, 600 active ingredients, registered sales systems, and strict supervision. The development of new active ingredients has become more difficult (one in 160,000), the investment cost is high (average US$300 million), and the development and sales cycle has been lengthened (more than 11 years), which has also greatly increased industry barriers.
2. my country's pesticides are large but not strong, and they are breaking through on the road
Rapid growth, an important part of the global industrial chain: my country's pesticide industry started late, but it has become the world's largest pesticide producer, with an export ratio of more than 70%, and the third largest consumer.
Environmental protection and safety supervision enter the park, and the industry is upgraded. From January to May 2019, the output of pesticide technical materials was 866,000 tons, -21.9% year-on-year, and the export was 670,000 tons, with an export ratio of 77.4%. my country's pesticide industry has a prominent problem of small fragmentation and insufficient research and development capabilities. There is still a big gap between the development goals set by the "13th Five-Year Development Plan for the Pesticide Industry" and the "Petrochemical and Chemical Industry Development Plan (2016-2020)". On March 21, 2019, Xiangshui was a particularly serious accident. Jiangsu Province, a major pesticide province, issued the "Jiangsu Province Chemical Industry Improvement Plan", catalyzing the acceleration of industry upgrading.
In 2018, my country’s pesticide exports were 8.07 billion U.S. dollars, of which 1.31 billion U.S. dollars were exported to the United States. Currently, the pesticide products listed on the list of additional tariffs are about 300 million U.S. dollars. In the short term, the export data is expected to be poor. However, due to the strict registration system adopted by various countries for the pesticide industry, re-export trade and the change of suppliers face great obstacles. The division of labor in the global pesticide industry chain has basically taken shape, and the Chinese original drug market cannot be completely replaced within 2-3 years. In the early stage, the United States removed glyphosate, glufosinate, and dicamba from the US$200 billion tariff list.
3. Industry catalytic factors
1. The overall valuation of the pesticide industry is low in ten years.
2. The second round of environmental protection inspections will be launched in 2019 and will end in 2021. In 2022, a "look back" will be launched and the scope of inspections will be further expanded.
3. In 2017, the fixed asset investment in pesticide manufacturing was 44.348 billion yuan, a year-on-year decrease of 13.48, and it was concentrated on the top.
4. The oil price center moves upward.
5. Since 2011, agricultural products have experienced more than eight years of sluggishness. In 2019, the co-consumption ratio of corn, soybeans, cotton sugar, and rapeseed oil was significantly lower than the average value of the past ten years. It has recently benefited from the expectation of easing global liquidity, Sino-US trade friction, etc. Influenced by factors, soybean and corn prices are strong.
6. Pesticides account for a relatively small proportion of the total cost of crops (less than 5%) and are not sensitive to prices. 7. Catalysis of "yao moth" and other pests and diseases.
Four, investment advice
Although the pesticide price index has continued to decline since 2019, considering the low industry valuation, high environmental protection, technology, parks, registration barriers, industrial upgrades, increased concentration, strong supply-side logic, superimposed demand-side agricultural product prices, and subsequent pesticides The price is expected to be repaired.
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