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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 15%.
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.
However, will China maintain its dominance in the glyphosate supply in the world? Will the export of Chinese glyphosate keep growing since it has already constituted over 70% of China’s total output? What will be the major factors influencing China’s export and towards what direction will they drive China’s glyphosate export? This report will answer all these questions.
At present, China's glyphosate has been characterized for the following features, soaring glyphosate price, and huge profit in China's glyphosate producers, exploding capacity driven by these two factors mentioned above, changing technology landscape in China's glyphosate production etc.
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. What has caused the price hike? How does it influence domestic glyphosate production and the export? What are the comments from Chinese producers, traders, experts and raw material suppliers on this situation and how will they react to this price hike? When will the turning point be? CCM will provide an in-depth analysis in this report.
Driven by the huge profits and increasing demand, many Chinese manufactures are expanding, launching or desiring to launch new glyphosate projects. It could be foreseen that production capacity of glyphosate in China will have a sharp rise in the next 2 years. The competition among Chinese glyphosate manufactures in China will become intense. Moreover, with the development of oversea producers, the competitions among countries will be fierce also. China is raising environmental threshold and environmental protection cost is increasing accordingly. So small-scale glyphosate production lines will be shut down. What is the future of glyphosate production in China? What's the competitiveness and competitive strategies of China's glyphosate in the future? With the price soaring of non-renewable resources and development of other herbicide or weed-control technology, in the far future, would glyphosate production centre shift away from China, or will the life cycle of glyphosate come to an end?
In China, there are three pathways for glyphosate production including glycine route, IDAN route and DEA route. With sufficient supply of glycine and steady production, glyphosate production with glycine route, the route used in China only among all the glyphosate production countries, confronts almost no bottlenecks, except that it causes more water pollution than that by the other routes, and that the production cost is also much higher than the other routes. Judged from the pollution and production cost, glyphosate production with glycine route should run down in the coming years. And the share of glyphosate produced by glycine route in China has decreased year by year, which seems to have proved such speculation. However, the output of glyphosate by glycine route increased rapidly in 2007, and the capacity of glyphosate by glycine route was also exploding in 2007 and 2008, and it wi