Industry Experts Weigh in on China’s Agrichemicals Market
We recently asked members of AgriBusiness Global’s Advisory Board to relay their thoughts on the future of China’s agrichemicals market and its supply chain.
Here are their comments:
Dr. Piyatida (Tung) Pukclai
Regional Business Development Director (Asia-Pacific)
Dr. Knoell Consult Thai Co. Ltd.
“From the regulatory side, the current regulation helps the big Chinese manufacturers and seems to be zero (or almost) growth for those smaller manufacturers. It is a consequence from the risk assessment-based and environmental/human-friendly. After new pesticides are registered (according to the new data requirements) in the next few years, small companies can still do me-too registration … if those smaller companies still exist.”
C S Liew
Pacific Agriscience Pte Ltd.
“In a word — uncertain! Production could be further negatively impacted if winter pollution issues continue to be a yearly feature. The pathway to a cleaner environment taken in 2017 will not be reversed. Prices will remain high and will go even higher if production and supplies are further curtailed. Two years from now will see another round of comprehensive government inspection of all plants, which adds to the uncertainty. Meanwhile, expect intensified consolidation in the Chinese manufacturing landscape, with fewer and fewer smaller plants and more being produced by bigger and bigger plants.”
“(A) Producers are getting less — and simultaneously bigger — creating, in the best of the cases, oligopolies. (B) The closing of plants plays against the investments made by companies in other countries when registering products from factories that don’t work anymore. (C) I don’t believe that the central government will go back with their policy soon, generating less offer of products and, in consequence, higher prices. (D) It is an opportunity for India and other countries to regain (or to gain) market share. Let’s see how things develop after CAC in March 2019. I guess it will be the usual game: before CAC — restraining offers, at least one to two weeks in advance; during CAC — gathering info and not mentioning prices; after CAC — trying to increase prices.”
Founding Director / COO
AWP Associates Ltd. / Bancella Ltd.
“China compliance and associates restructuring: continued supply chain disruption due to ongoing compliance; consolidation as factories acquire assets to secure their supply chains; further inspections with increasing focus on H&S; attempts by Chinese manufacturing organizations to offshore to select geographies. Ongoing Indian efforts to level the playing field: increasing efforts by Indian organizations to backwardly integrate; potential efforts by industry to fast-track registrations of select chemistries and their formulations in an attempt to seize market share; increased Chinese interest in securing certain materials from India and their attempt to de-risk geographically.”
Fanwood Chemicals Inc.
“I expect it to be a continuing challenge. Key first step will be known in about 3 weeks – do they come to a deal with the President and avoid the imposition of 25% tariffs. The environmental situation continues to be troubling. Last, but certainly not least, SinoChem is not firmly in control of Syngenta, though they have not ‘acquired’ ChemChina. This situation eventually has to be clarified by world-wide antitrust authorities. How it is resolved could have a significant impact on the supply of Chinese sourced actives.”