Strengthening Yuan Hits Chinese Exports

While from the outside China seems to be unstoppable in gaining market share around the world, China’s exporters are facing one significant problem at the moment: the rising value of the renminbi (RMB), according to an article by Tranalysis, an import and export data analysis provider.

The rising currency is cutting into profits and forcing some to raise prices, which is reducing demand and competitiveness overseas, Tranalysis said.


The RMB was valued up by the government over the course of 2017 with an annual growth of 6.3%. As a result, the exchange rate from USD to RMB has been changed from 6.9 at the beginning of 2017 to 6.3 at the beginning of 2018. 

The higher value of the Chinese RMB is reducing the overall revenue of exporting companies, which are focusing mainly on overseas profits.

In 2018, RMB has continued to strengthen. As of 2 February 2018, the USD/CNY exchange rate was 6.2885. The continuous increases in value are making exports for Chinese enterprises more difficult, and the trend does not look to be changing anytime soon.

According to experts, there is potential for strong growth of the Chinese yuan this year. China’s currency strength has more room to grow. In 2018, the RMB is off to a stronger start than 2017, appreciating by 2.6% versus the US dollar, or over 30% annualised.

Historically, the Chinese currency only moves 6% to 7% in a year. For example, looking back to the year when the Chinese currency moved the most, which was in 2016, a decline of 6.8% was witnessed.

But the higher value of RMB is not only raising problems for the domestic exporters. Other countries are complaining about China’s currency value growth. In fact, the development is causing some criticism that the export giant has been deliberately suppressing its currency to gain economic advantage over its trading partners. Some experts even have said the world’s second-largest economy is also propping up its currency to appease U.S. President Donald Trump.

Some Chinese export examples

According to China Customs, the country exported almost 200 thousand tonnes of cornstarch in the first three quarters of 2017, up by 150% over the 78,000 tonnes the same period in 2016. The prosperous export business boosted the domestic market. However, in regards to starch sugar, due to rebounding domestic prices, the appreciation of the RMB, and slumping international sugar prices, China’s export volume of starch sugar declined in September down 12.74% YoY.

China’s TiO2 market remained stable in the last months. Although some large-scale manufacturers quoted higher prices for their products, no great changes were seen in the actual transaction prices thanks to the appreciation of RMB and sluggish downstream demand.

China’s glyphosate prices continued falling in February 2018. The prices early in the month were lower than at the end of January. It is predicted that the prices are unlikely to rise before the Chinese Spring Festival in view of current supply and sale. What’s more, the appreciation of the RMB recently also restrains the enthusiasm for export, according to Tranalysis.

The Chinese phosphate fertilizer industry, already suffering from overcapacity problems, is set to face more challenges by the ongoing appreciation of the RMB, which could push many producers, especially DAP producers, to the edge of extinction. If the FOB price of DAP is RMB3300/t, the appreciation of the renminbi from 6.3 to 6.16 to the USD means that prices have risen by USD11.90 per tonne. Chinese DAP exporters have to raise prices or absorb the loss. But overseas buyers won’t accept price increases, especially in the current international DAP market. In the meantime, the exchange rate of RMB to USD is still keeping an uptrend. Correspondingly, the pressure to phosphate fertilizer industry posed by the RMB appreciation will continue, let alone the undervalued international DAP price, according to Tranalysis.

Topics: ,

Leave a Reply



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


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.


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

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

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."


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

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


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


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.


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.


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.


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


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.”


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


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

Dr. Wayne Tan of CAC Group talks outlook for China's agchem companies amid the country's environmental crackdown.


Platform Confirms Arysta Sale to UPL, to Change Name

Platform has signed a definitive agreement to sell Arysta LifeScience Inc. to UPL Corporation Ltd. for $4.2 billion in cash, subject to customary closing adjustments Closing


Crop Protection Key to Doubling Indian Grower Income – Report

Despite all its achievements, Indian agriculture is still grappling with challenges like high monsoon dependency, unpredictable weather patterns, reduction in arable land, low per hectare yield, and lower farmer incomes.


Ning Replaces Ren as Syngenta Board Chair

Jianxin Ren, Chairman of the Board of Directors of Syngenta AG, has retired from the company's board.


Hemani Industries Launches Branded Formulation Division

Hemani Industries Limited, serving international agrichemical customers for more than three decades, has launched its branded formulation division to serve

Latest News


Trump Trade War Divides Farming World as China Demand Shifts

Soybeans have become something of a poster child for the U.S.-China trade war, with everyone from Treasury Secretary Steven Mnuchin


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

Industry News

Escalating Trade War with China Will Increase Damage to American Soybean Farmers

The Administration’s decision to impose 10% tariffs on an additional $200 billion in Chinese imports — and China’s subsequent retaliation

Plant Health

Favorable Soil pH: Does it Really Increase Nutrient Use Efficiency?

More than ever agriculture needs to follow principles of sustainability that ensure build up and maintenance of long-term soil productivity,

Plant Health

Diagnosing and Mapping the Need for Soil Improvement in Brazil

Brazil has lacked the data for creating a soil fertility survey that could be used for assessing if any nutritional