Live from Trade Summit: No Reprieve for China’s Agchem Producers

Tan

Dr. Wayne Tan led off his talk at the AgriBusiness Global Trade Summit on Aug. 1 with a saying that spread around the Internet in China last year.

“If you want to know the price of something in China, look up at the sky. If it’s blue, the price is up. If it’s smoggy and grey, the price is low.”

The current skies are blue, and they look to be getting even bluer over the next three years – which is at least how long China’s environmental inspections are expected to continue, Tan, Marketing Department Deputy Manager with CAC Group China, told the audience.

Here are the key takeaways from Tan’s presentation, “Environmental Protection Situation in China: The Impact on the Agrichemical Supply”:

  • China instituted a pair of measures on Jan. 1, 2018: an environmental protection tax, the more waste discharged from your plant, the more tax you pay. The other is a compensation system for environmental damage. Any producer who wants to discharge waste must get a license, and you’re charged for every kg of waste discharged. Any damage you incur from production of waste requires compensation.
  • Relocation of companies begins in 2018, involving three groups: non-compliant small- to medium-sized enterprises, big producers with potential environmental risk, and all those within 1 km of the Yangtze River.
  • Be aware of the environmental inspection “look-back.” Inspection teams are being sent back to provinces to see if problems have been resolved, and the results have not been good, Tan said. Less than 30% of problems have been resolved – most are still there. Inspection teams are expected to cover the entire country again in three years. “It seems inspection will be a regular event in China – it has not ended,” Tan said.
  • How will all of this impact agchem producers? The picture is bleak, because of the relative small size of the country’s agchem industry, which is not considered as important to the Chinese economy as much larger chemical manufacturers. The future favors the large-scale chemical companies.
  • The Chinese government’s goal in 2020 is to have 30% fewer producers than 2016, when there were 2,000-plus agchem producers and more than 500 AI producers. The goal is also to have 50% of producers located in chemical parks, up from 46% in 2016.
  • How serious is the situation? One top-10 Chinese agchem company was found at the beginning of 2018 to be non-compliant. The facility was shut down, fined $850,000, seven employees were arrested, and five local government leaders were punished. Many thousands more throughout the country have been shut down, fined millions of dollars and/or reprimanded.
  • China and India are in a competitive-cooperative relationship. Right now, China’s agchem manufacturing efficiency is very high. “Some Chinese producers are starting to think about investing in India for manufacturing of specific products,” Tan said.
Topics: ,

Leave a Reply

One comment on “Live from Trade Summit: No Reprieve for China’s Agchem Producers

Asia

US-China-Trade-War
Asia

China Eases Pollution Campaign in Move to Offset U.S. Tariff Impact

China’s government announced it is scaling back its pollution control campaign this fall and winter, in an effort to offset

Indonesia_rice
Asia

Fungicide Use on the Rise in Indonesia

The global crop protection market in 2017 increased at a rate of 1.9% in nominal terms over that of 2016.

Rice
Agrichemicals

BASF Launches Revysol Fungicide in South Korea

With the first global regulatory approval for the new compound received from South Korean authorities earlier this year, farmers in the country will be among the first in the world to benefit from the company’s latest offering.

Agrichemicals

Willowood USA to Hike Prices on Tariffs

Willowood the latest U.S. agrichemical company to announce price hikes.

Agrichemicals

Citing Tariff, Albaugh Raises Prices

"We are left with no alternative but to increase prices reflective of the higher tariffs."

Asia

India Could Fill Gap in Agricultural Imports Amid China-U.S. Trade War

The ongoing China-U.S. trade dispute will provide a chance for China and India to strengthen their agricultural trade, which will

Agrichemicals

What to Do If You Have Products Subject to New U.S. Tariffs

The new retaliation lists hit almost every product that the Chinese import from the U.S.

Americas

Trump Tariffs on Chinese Imports to Begin Sept. 24

Starting Jan. 1, 2019, the level of the additional tariffs will increase to 25 percent.

Pam Marrone
Asia

Marrone Enters Distribution Partnership in Vietnam, Cambodia

Key factors driving the rapid adoption of biologicals in Vietnam include pesticide residue problems in agro-products for local consumption, new requirements for Maximum Residue Levels on agro-products imported to the EU and U.S., and a growing number of banned pesticides.

vietnam flag
Asia

Vietnamese Government Encouraged to Embrace Ag Innovation

"We call on the government to ensure that crop protection tools are properly assessed through a consistent, scientifically rigorous process in line with internationally accepted methods and standards."

Asia

Cargill Looks to Crop Enhancement Inc. in Indonesia

Indonesian cocoa growers in Cargill’s extensive network are eager to expand their use of this effective, farmer-friendly solution that reduces the need for synthetic pesticides.

Flag of China
Asia

Agriculture in the U.S. and China: The Present and the Future

In part because of current events involving a high-profile trade dispute, agriculture in the U.S. and China has been thrown

Asia

Small Steps Are the Way for Sulphur Mills

While China’s industry deals with a difficult transformation, and India eyes the opportunity, the nuances of the situation can’t be overlooked. India is grappling with its own set of challenges

Asia

A Unique Advantage for Anupam Rasayan India Ltd.

Gujarat-based Anupam Rasayan is working its status as a custom manufacturer that operates independently of Chinese materials to its maximum advantage.

Agrichemicals

Hedge Hurts ADAMA Profit, While Sales Rise

The past two quarters have seen the beginnings of a recovery in demand for crop protection products in many markets, despite ongoing low soft commodity prices and farmer income.

Agrichemicals

Sourcing Agchem from China: An Outlook that Demands Strategic Planning

C S Liew, Pacific Agriscience Pte Ltd, Singapore, examines the repercussions of the Chinese environmental crackdown and sourcing at the 2018 Trade Summit held in Phoenix, Arizona.

Agrichemicals

Is India a Future Manufacturing Hub for Agrichemicals?

The changing scenario in global trade has made a significant impact on agrichemical business in India. Although the country is

Asia

India’s Hemani Industries Forges New Partnerships

“I think customers are tired of having so much inconsistency in supply. There’s a mystery of what’s going to be available and what’s not, so they want to go into a partnership so they’re assured of supplies, and hopefully, prices.”

Asia

Tariff Wars Promise New Pain for Agriculture Come October

According to the calendar, the current tariff war between the U.S. and China began in early July. However, according to

Latest News

Asia

China Eases Pollution Campaign in Move to Offset U.S. Tariff Impact

China’s government announced it is scaling back its pollution control campaign this fall and winter, in an effort to offset

Agrichemicals

HELM Agro Fungicide Approved in California

HELM Agro US, Inc. announced that the California Department of Pesticide Regulations (CDPR) has approved Helmstar Plus SC fungicide for

Asia

Fungicide Use on the Rise in Indonesia

The global crop protection market in 2017 increased at a rate of 1.9% in nominal terms over that of 2016.

Biopesticides

Bayer Biological Product Registered in France

Bayer said its Serenade ASO fungicide/bactericide has received registration in France for foliar and soil applications on a wide range

Americas

Paraguay: A Hidden Gem in the Agrichemicals Market

Whenever agchem players think of the South American markets, Brazil will be the one that comes to mind. It became