China Supply Update

Fang Lin, ChemLinked, Reach 24H Consulting Group

Fang Lin, ChemLinked, Reach 24H Consulting Group

The supply of AIs is stabilizing due to new capacity being built by large Chinese enterprises, Regulatory Analyst Fang Lin told FCI Global Sourcing Summit attendees Dec. 8 in Delhi, India. Short-term supply disruption plagued buyers earlier this year due to newly enforced environmental regulations and changes to export rules. But large companies are amid capacity expansions in industrial parks and in Western provinces where enforcement of environmental regulations are more lenient.

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While availability suffered for some products, the supply disruptions did not cause price fluctuations as many buyers feared. “Chinese companies saw flat growth on technical grade products’ price and output,” said Fang, who analyzes the industry for ChemLinked, the agrochemical division of Reach 24H Consulting Group.

Volume of technical-grade products exported from China fell 15% last year compared to 2012, and it is down almost 4% in the first three quarters of 2014 compared to the same time last year.

However, formulated product exported from China is on the rise, perhaps as a result of stagnant prices on tech and the rising cost of production due to facilities upgrades and rising labor costs. Formulated exports surpassed tech exports for the first time in 2011. It has experience double-digit increases each year since then and is expected to reach 1 million tonnes this year.

Glyphosate continues to be the largest AI exported by China, followed by paraquat, imidacloprid, acephate and chlorpyrifos. The top 10 destinations for glyphosate exports account for 70% of the total supply. The top 10 markets account for 50% of all pesticide exports from China.

Fang also taught attendees how to analyze and verify ICAMA export certificates so buyers can spot forgeries and verify the quality of companies.