Glyphosate China Monthly Report

Copyright © CCM International Limited

Vol. 3 Issue 01 , 2011

Glyphosate China Monthly ReportVol. 3 Issue 01 Publication date: 20 January, 2011

■ Company DynamicsChemchina acquires 60% share of Makhteshim-Agan .................................................................... 1Nantong Jiangshan: Government subsidy aids profit .................................................................... 1■ Global DynamicsEU cancels anti-dumping measures on Chinese glyphosate ...........................................................2■ Market AnalysisHigh cost and unstable supply result in Chinese DEA's little use in glyphosate ............................3Domestic glyphosate 41% IPA dominates Chinese market .............................................................3Phosphorus resource determines global glyphosate distribution and redistribution ....................4AEA route to remain dominance in future 3 years ..........................................................................5■ Price AnalysisGlyphosate price keeps stable in January 2011 ...............................................................................5■ RegistratioinGlyphosate 41% IPA dominates China’s glyphosate registration ....................................................6■ Export AnalysisGlyphosate export price uptrend continues in November 2010 ..................................................... 7

Content

China Crop Protection Summit 2011

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Coming Reports from CCM:- Global Commercial Opportunities Derived from Glyphosate Industry (To be launched in Apr. 2011)- Global Chlorpyrifos Survey

Ready Market Reports:-Production and Market of Chlorpyrifos in China -Survey of Pesticide Industry in China –Edition 2 - Nicosulfuron Survey in China

- MIPA Survey in China- Future Prospect of Genetically Modified Crops- Glycine Survey in China - Production and Market of Paraquat in China - Outlook for China Glyphosate Industry 2009-2014- The Survey of 2,4-D in China - IDAN Survey in China

CCM newsletters related to Glyphosate:- Herbicides China News- Crop Protection China News- Insecticides China News- Fungicides China News

CCM trade analysis related to Glyphosate:- Glyphosate- Clomazone- Paraquat- Fluroxpyr- Dicamba- 2,4 D- ……

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Glyphosate China Monthly Report Vol. 3 Issue 01, 2010

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Editor NoteWelcome to Glyphosate China Monthly Report 1101, the first issue of the third volume. Glyphosate China Monthly Report collects the breaking news and raises the hottest topics occurred in China’s glyphosate industry, help you reveal mysteries in glyphosate and relative industries.

Entering the new year 2011, Chinese glyphosate has been undergoing the gloomy market for over two years, and the glyphosate price remains undervalued, resulting from the severe surplus capacity and stagnant overseas demand.

After many years’ attempt and endeavor, Chinese companies’ overseas merging in agrochemical businesses has achieved great progress. ChemChina has signed agreement to acquire 60% share of Makhteshim-Agan, one of the global top 10 pesticide suppliers. After the acquisition, ChemChina could integrate its agrochemical business globally, and glyphosate products produced by its subsidiaries could be sold in overseas market via Makhteshim-Agan sales network. The successful acquisition will not only help ChemChina for its overseas market exploitation in agrochemical business, but also set a good example of the overseas acquisition and merging for Chinese company.

Presently, China encounters stalled increase of glyphosate export, the formal termination of anti-dumping measures on China’s glyphosate in the EU market seems a good news, but there are many challenges for Chinese companies’ market exploitation there. Chinese companies should overcome difficulties to seize the high-end market in EU and gain relatively higher profit.

■ Chemchina acquires 60% share of Makhteshim-Agan, which would accelerate its subsidiaries glyphosate business exploitation in overseas market.

■ Nantong Jiangshan acquires government subsidiary and may enjoy positive profit.

■ EU formally cancels anti-dumping measures on Chinese glyphosate in December 2010.

■ High cost and unstable supply result in domestic DEA's little use in Chinese glyphosate.

■ Domestic glyphosate 41% IPA dominates Chinese market, thanks to many advantages over other formulations.

■ Phosphorus resource determines global glyphosate distribution and redistribution

■ AEA route to remain the dominance in future 3 years, thanks to its production cost advantage.

■ Prices of glyphosate products experienced slight fluctuation in January, reflecting the stagnant market.

■ Glyphosate export price uptrend continues in November 2010

■ Glyphosate 41% IPA dominates China’s glyphosate registration, reflecting the its promising market.

Headlines

Main companies mentioned in this issue

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■ Company Dynamics

China National Chemical Corporation (ChemChina)’s acquisition of

Makhteshim-Agan Industries Ltd. (MAI) has achieved great progress. On January 8, 2011, after the approval of MAI's Audit Committee and Board of Directors, it signed an agreement with ChemChina Agrochemical Corporation, a subsidiary of ChemChina, to carry out a merger, whereby all the holdings of the public share of MAI (53% of the total) and 7% share of MAI’s current controlling shareholder Koor Industries Ltd. (Koor) would be purchased.

After the transaction, MAI would become a private company under joint ownership of ChemChina (60%) and Koor (40%). ChemChina will cost USD1.44 billion for the deal, of which USD1.272 billion will be used for buying the 53% public share of MAI and USD168 million for buying the 7% shares from MAI’s current parent company, Koor.

Under the deal, Koor will retain 40% shares of MAI and ChemChina will arrange a seven-year non-recourse loan of USD960 million to Koor, extending the deal size to USD2.4 billion. The loan is taken on mortgaging Koor's 40% stake in MAI, which could be repaid either by cash or through selling shares of MAI.

The deal is China’s largest overseas acquisition case in agrochemical field, and this successful transaction will help Chinese companies carry out more overseas merging. In the past years, some Chinese companies attempted to acquire overseas agrochemical producers but failed. In 2007, ChemChina gave up taking over Australia's Nufarm because of the failure of some agreement, and another Chinese state-owned giant Sinochem Corporation had also failed to acquire Nufarm in 2009.

The transaction would help ChemChina establish overseas network in agrochemicals business, including glyphosate. After the transaction, ChemChina can take advantages of MAI’s sales network to sell glyphosate produced by its subsidiary members. According to CCM international’s in-depth glyphosate export analysis report, MAI has imported more than 5,000 tonnes of glyphosate technical from China annually.

As to MAI, the transaction will also help for its market exploitation in China, a large and expanding agrochemical market in the world.

ChemChina, China’s largest chemical corporation fully owned by the Chinese government, operates in six major fields: basic chemicals, special chemicals, refined petroleum products, agrochemicals, rubber products, and chemical equipments. ChemChina’s agrochemicals activities are centered in its subsidiary ChemChina Agrochemical Corporation, which holds six subsidiaries including Sanonda Group, Cangzhou Dahua Group, Shandong Dacheng Chemicals Group, Jiangsu Anpon Electrochemical Co., Ltd., Jiangsu Huaihe Chemical Co., Ltd. and Jiamusi Heilong Agricultural and Industrial Chemical Co., Ltd.Jiangsu Anpon Electrochemical Co., Ltd. and Sanonda Group’s listed subsidiary Hubei Sanonda Co., Ltd. have glyphosate technical production lines with capacity of 10,000t/a and 20,000t/a respectively.

MAI is a leading global manufacturer and distributor of generic crop protection products. With sales of USD2.2 billion in 2009, MAI ranks the seventh in global agrochemical companies and the fourth in Europe, with a global share of over 5% in crop protection market. But MAI has only registered two pesticides namely ametryn and trifluralin in China.

Chemchina acquires 60% share of Makhteshim-Agan

Nantong Jiangshan: Government subsidy aids profit

On January 11, 2011, Nantong Jiangshan Agrochemical &

Chemicals Co., Ltd. (Nantong Jiangshan)announced its estimated positive profit in the fiscal year 2010. The expected positive profit is attributed to the local government’s subsidiary with amount totaled USD21.4 million (RMB140 million).

The positive profit in 2010 will make Nantong Jiangshan avoid the warning from China Securities Regulatory Commission (Note from CCM: According to Chinese Securities Law, listed company with negative profit for consecutive two years should be marked as special treatment in the Stock Exchange).

Nantong Jiangshan, the second largest producer of glyphosate technical with

capacity of 70,000t/a, has encountered continuous profit loss in the past six quarters, due to the gloomy undervalued market price of glyphosate, one of the major business in Nantong Jiangshan.

Because of China’s severe surplus supply and stagnant overseas demand, Chinese glyphosate price had kept in the low level in the whole year 2010, and many glyphosate manufacturers suffered low operation rate and profit deficit.

According to Nantong Jiangshan’s company’s Annual Report 2009 and Semi-Annual Report 2010, glyphosate business has taken up about 50% of the total revenue. But profit rate of glyphosate technical is very low. The company has reported a gross profit margin of 1.91% in the Semi-Annual Report 2010.

According to CCM International’s monthly export analysis report, Nantong Jiangshan has exported 33,526 tonnes of glyphosate technical and 3,960 tonnes formulations in the first eleven months this year, indicating the operation rate of about 60%.

It’s reported that operation rate of AEA route glyphosate in Nantong Jiangshan is very low and this production line with capacity of 30,000t/a had suffered great loss, which directly resulted in huge loss in major business.

Now Nantong Jiangshan is endeavoring to raise money to relieve its cash flow pressure and expand investment in some constructing projects.

On 4 January, 2011, Nantong Jiangshan

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announced that it had decided to transfer 19.65% shares of its subsidiary Nantong Jiangtian Chemicals Company (Nantong Jiangtian) with value of USD4.41 million (RMB29.44 million) to its second largest

stockholder Nantong Industries Holding Group Co., Ltd.

On 11 January 2011, Nantong Jiangshan announced that its largest stakeholder

Sinochem International would offer a consignment loan with amount of USD45.5 million (RMB300 million) to Nantong Jiangshan.

■ Global Dynamics

On December 16, 2010, the European Union (EU) announced on its official

website that European Commission had decided to terminate anti-dumping measures on glyphosate products originated from China since December 13, 2010, indicating that the over 15-year anti-dumping dispute has drawn to an end. The final judgment will promote Chinese exporters' enthusiasm about exploiting EU market, but there are still many challenges for Chinese exporters.

The final judgment is based on EU’s one year investigation during September 2009 to September 2010. On 29 September 2009, the European Glyphosate Association appealed expiry review for anti-dumping duties on Chinese glyphosate to the European Commission, and then European Commission resumed investigation. No proof on Chinese glyphosate's dumping actions has been found after one-year investigation, and the complainant withdrew the petition in September 2010. In October 2010, some Chinese glyphosate manufacturers such as Jiangsu Good Harvest-Weien Agrochemical Co., Ltd. had received the pre-notification of European Commission’ final judgment on anti-dumping dispute.

The final judgment of sunset review would draw the 15-year dispute of the dumping charge on Chinese glyphosate to an end.

For the sake of protecting EU enterprises against dumped imports from the countries who are not members of the EU, EU initiated anti-dumping investigation into the

imports of glyphosate originated from China in 1995. Some Chinese glyphosate producers such as Wynca and Good Harvest-Weien have actively responded to the case and appealed against EU’s anti-dumping duties levied on Chinese glyphosate, from then on, different anti-dumping rate have been imposed in different periods. The long time anti-dumping war between EU and Chinese glyphosate exporters has experienced ups and downs.

In the former times of EU’s temporary cancellation of anti-dumping, many Chinese glyphosate producers expressed that they had not been encouraged by the good news, because of anxiety about the resumed anti-dumping duties later. The final judgment, which ends the anti-dumping process on Chinese glyphosate in EU market, will promote Chinese manufacturers’ enthusiasm for exploiting EU market. Now market share of Chinese glyphosate in EU is very small and has great potential to increase in the future.

According to CCM’s import/export

analysis, China had directly exported about 2,500 tonnes of glyphosate technical and about 4,000 tonnes of glyphosate formulations to EU in 2009, only constituting 1.31% of China’s total export volume of glyphosate AI in 2009.

However, Chinese glyphosate manufacturers will face two major difficulties as before in extending glyphosate business in the EU market. For one thing, it is hard for Chinese enterprises to compete with multinationals and local enterprises that have existing various sales channels, especially Monsanto.

For another, too high certification fees, such as cost on impurity content identification and environmental risk test, are obstacles on Chinese producers' way to compete in EU market. EU has been stringent in glyphosate quality and formulated high requirements for imported glyphosate, such as GLP certification.

EU cancels anti-dumping measures on Chinese glyphosate

TABLE 1: EU’s anti-dumping investigation into Chinese glyphosate, 1995-2010

Time EU’s action

1995 Initiated anti-dumping investigation

Feb. 1998 Levied 24% anti-dumping duties

2000 Levied 48% anti-dumping duties

24 Sept. 2004 Levied 29.9% anti-dumping duties

May 2009 Temporarily cancelled anti-dumping duties for 9 months.

Sept. 2009 Initiated expiry review

Feb. 2010 Extended suspension of anti-dumping duties for one year

Dec. 2010 Formally terminated anti-dumping duties

Source: CCM international

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■ Market Analysis

High cost and unstable supply result in Chinese DEA's little use in glyphosate

Though domestic DEA capacity and quality could satisfy DEA route

glyphosate technical production, only a small amount of domestic DEA has been used in China’s glyphosate production. The main reasons accounting for this are the higher cost and unstable supply of domestic DEA.

CCM International’s former investigations have shown that the main reason for the little use of domestic DEA in glyphosate production might be its poor quality. But recent interviews with some professionals in DEA market have revealed that domestic DEA, after many years’ improvement, can satisfy domestic glyphosate production.

"Glyphosate technical produced by imported DEA and homemade DEA are without significant difference. Chinese glyphosate produced from domestic DEA is acceptable in overseas countries." Said Mr. Xu Qingwei, area sales manager of Fushun Jiahua Chemicals Co., Ltd., an EA producer with capacity of 20,000t/a and

TEA being its major product."Some newly launched EA production lines use equipments with the world’s advanced level." Mr. Xu added.

"The main reason for the little use of domestic DEA in glyphosate production is the price disadvantage." Said Mr. Xu.

According to CCM International’s DEA import analysis, price of imported DEA (importer’s price) is about USD1,200/t (RMB8,000/t), only two thirds of China’s homemade DEA.

Mr. Xu expressed that there are three main reasons accounting for the lower price of imported DEA. ‘Firstly, overseas producers usually have both EO production lines and EA production lines, which could enjoy lower cost, but China’s EO production is controlled by state-owned China National Petroleum Corporation and China Petroleum & Chemical Corporation. Secondly, overseas companies have more advanced technology and hence higher yield

than domestic manufacturers. Thirdly, overseas producers have deliberate strategy to purchase raw materials when its price is low.’

Mr. Tan, area sales manager from Dow Chemical said one main reason for the little use of domestic DEA in glyphosate is the unstable supply. "As the raw material EO is controlled by China National Petroleum Corporation or China Petroleum & Chemical Corporation, EA producers should apply for the use of EO from the two state owned giants, resulting in the unstable production of EA."

"The domestic DEA quality is not the key reason for the little use in glyphosate, though it is relatively poorer than imported product." Tan added.

According to Tan, Jiangsu Yinyan Specialty Chemical Co., Ltd., the only Chinese company producing both DEA and glyphosate technical, sometimes uses imported DEA alternatively to produce glyphosate.

Domestic glyphosate 41% IPA dominates Chinese market

As glyphosate 10% SL is gradually withdrawing Chinese market, domestic glyphosate 41% IPA with excellent effect,

which has been effectively promoted in 2009 and 2010, has become the first choice for Chinese peasants.

In February 2009, Chinese government issued an administrative regulation to ban the registration and production of glyphosate formulation with AI content (calculated by glyphosate acid technical) lower than 30% since January 1, 2010, and glyphosate 10% SL, the most popular glyphosate formulation used in China before, would withdraw the market gradually in the following two years (Chinese pesticides has two years’ quality guarantee period). The exit of glyphosate 10% SL has left large market for other glyphosate formulations that can meet the new AI content requirement (glyphosate acid content should be not less than 30%).

Glyphosate 41% IPA is expected to be the most popular formulation in the future. In 2009 and 2010, most producers who registered glyphosate 10% SL before had changed their registrations to glyphosate 41% IPA, and new applications also considered glyphosate 41% IPA as the first choice. Many domestic glyphosate producers devote their energy in glyphosate 41% IPA promotion in the past two years. It's estimated that the proportion of domestic glyphosate 41% IPA in China’s total glyphosate consumption volume will exceed

60% in 2011, which is five times more than that in 2008.

In fact, based on domestic glyphosate 41% IPA’s advantages, the dominance of homemade glyphosate 41% IPA in China is an inexorable trend.

■ 41% IPA vs. other formulations

Many glyphosate formulations have been registered in China, including IPA salt liquid, ammonia salt liquid, sodium salt liquid, potassium salt liquid, soluble powder and soluble granule, with a variety of grades, but the most popular formulations registered is glyphosate 41% IPA.

Compared with other formulations, glyphosate 41% IPA has the following advantages:

1) Peasants’ familiarity. Monsanto’s well-known brand ‘Roundup’ has built very good reputation in China with its excellent weed control competence and convenient usage, and Chinese peasants are very familiar with the function and spraying method of ‘Roundup’. Thus, homemade glyphosate 41% IPA, the similar weed control effect and spraying technique as Roundup, is very acceptable by Chinese peasants.

2) Convenient usage. Compared with SP or WSG

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formulations, 41%IPA is easier to be used.

3)High weeding efficacy. Many researches have shown that glyphosate IPA formulation has the highest efficacy among the existing formulations when used in the same dosage.

4)Low technological requirement and guaranteed quality. Processing technology of glyphosate 41% IPA is relatively low and can be grasped by most producers. Its actual effect is mainly determined by the performance of added adjuvant. But glyphosate WSG formulation, with higher AI content than 41% IPA, requires high processing technology, and its quality can’t be as stable as 41% IPA.

■ Domestic glyphosate 41% IPA vs. Roundup

Frankly, the comprehensive weeding efficacy of domestic glyphosate

Phosphorus resource determines global glyphosate distribution and redistribution

When regarding to the question why China is the world’s largest

production base of agrochemicals, many people may consider China has low manpower cost, low environmental expenditure cost as well as good chemical industry foundations. In fact, the accessibility of some nonrenewable resource for producing some irreplaceable raw materials, is a very important factor determining global pesticide distribution. As to the glyphosate industry, the key resource phosphorus has determined global glyphosate distribution and redistribution.

Recently, CCM International has carried out a survey on evaluating the importance of factors determining the destination area to which future glyphosate technical capacity may be transferred. More than 70% of the respondents who are all specialists in glyphosate industry have chosen the phosphorus resource as the most important factor.

Glyphosate, the most widely used pesticide in the world with annual global consumption volume of about 650,000 tonnes presently, is an organophosphorus pesticide, and its development is highly depended upon the upstream raw material, phosphorus trichloride. The abundant phosphorus resource is one important reason for China’s large amount export of phosphate ore and its downstream products including glyphosate.

To produce a tonne of glyphosate technical, about 1.2~1.5 tonnes of phosphorus trichloride is needed. China, the largest production area of glyphosate technical, could consume more than 130,000 tonnes of yellow phosphorus, which constitutes 14~15% of China’s total output.

As a kind of non-renewable resource, phosphorous resource has been well protected in other countries that are also rich in phosphorus reserves. Exploitation in those countries has slowed down and phosphorus ores output saw a downtrend in recent years. So the cost of importing phosphorus resource to produce downstream agrochemicals is very high and less competitive in the global market.

China, the second largest reserve of phosphorus resource, has the highest exploitation speed of phosphorus resource in the world and exported the largest amount of phosphate ores and its downstream products including glyphosate.

In the 2010 Symposium for China’s Glyphosate Industry held in Hangzhou in May, Professor Zhang Yibin from Shanghai Pesticide Research Institute has put forwards that limited phosphorus resource will become a main threat to China’s glyphosate industry in the long run. He quotes a Chinese Academician’s research that China’s high grade phosphate ore (note from CCM: high grade phosphate ore means that

the content of converted phosphorus pentoxide in the phosphate ore is higher than 30%) will be used up within 20 years if China keeps exploring phosphorus resource at such a high rate in the future years.

Fortunately, Chinas has banned the export tax rebate and levied high export tax of yellow phosphorus and phosphate ores, which has slowed down the export of low added-value phosphorus products.

Pesticide production is being moved toward the raw material or resource productive areas in the world.

Only a few countries own a large amount of phosphorus resource, and the possible regions of new glyphosate technical production base, if there is, would be in the regions or countries near by these countries. However, the glyphosate technical capacity transfer is also restricted by other factors such as cost, available manpower, foundation of basic chemical industry, etc.

Detailed research about the global phosphorus distribution and in-depth analysis of the possibility of glyphosate capacity transfer among countries, please pay attention to CCM International’s unique report “Opportunities Derived from Global Glyphosate Industry” which is to be finished in April 2011, or the future issues in Glyphosate China Monthly Report.

41% IPA is relatively lower than the world’s famous brand Roundup. But with the technology improvement of domestic glyphosate 41% IPA, the gap of weed efficacy between domestic glyphosate 41% IPA and Roundup is being shortened. It’s reported by many companies that domestic glyphosate 41% IPA formulations have no significant differences in many compulsory indices when compared with Roundup.

As the domestic glyphosate 41% IPA has price advantage over imported Roundup, coupled with the increasing promotion of domestic glyphosate 41% IPA, many Chinese peasants choose to buy homemade product in a low price and without no significant efficacy inferiority. It’s a fact that consumption volume of Roundup in China is decreasing year by year in recent 5 years.

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AEA route to produce glyphosate, the first route developed and solely

adopted in China, will keep its dominance in the short term due to its lowest production cost.

Three routes, namely AEA route, DEA route and IDAN route are all operated in China’s glyphosate technical production, with designed capacity proportion of 60%, 18% and 22% separately in 2010. With the increasing consideration in glyphosate industry integration, the development trend of the three routes is an interesting topic and hot issue at present.

According to CCM’s latest research, which is a part of CCM International’s unique report “Opportunities Derived From Global Glyphosate Industry”, AEA route will still dominate the market in the short or medium term (less than three years) in the future.

Generally, cost and quality determine a product’s comprehensive competiveness and its development trend. Although the highest glyphosate AI content could be achieved in AEA route (max. 95%) is inferior to that in DEA or IDAN route (max. 97%), Chinese glyphosate technical produced by AEA route is widely accepted by most overseas countries. So the factor of glyphosate product quality is not an important factor regarding to competitiveness and development trend in the future.

According to Gavin Yin, senior researcher

in CCM International who is taking charge of this research, the production cost of AEA route is about USD300/t (RMB2,000/t) lower than IDAN route or DEA route at present. “Taking the by-product recycle into consideration, the total production cost by adopting AEA route could be USD450/t (RMB3,000/t) lower than IDAN and DEA route.” said Gavin Yin.

“Furthermore, the price of glycine, key raw material in AEA route glyphosate, is the least sensitive to the change of primary energies petroleum and natural gas prices. The cost advantages in AEA route will be larger in the period of petroleum’s price uptrend.” Gavin Yin said.

With over two decades’ development, China’s AEA route glyphosate have achieved great progress, and the yields in many synthesis steps have made achievement, and it’s the most mature route.

Though AEA route glyphosate has disadvantage in waste water treatment compared with IDAN or IDA route, the advantages in lower raw material cost and higher gain in by-product recycling can completely offset the higher waste water treatment expenditure. In fact, the waste water treatment technology in AEA route has achieved great progress. The membrane filtration technology, which has lower cost than the traditional evaporation technology, has been introduced in AEA route, and gap of

environmental expenditure between AEA route and IDA route is being shortened.

It should be noticed that AEA route’s cost advantage is not absolute in the long run. If the production cost in IDA route or IDAN route significantly decreases, resulting from the improvement of raw material synthesis technology or IDA route glyphosate synthesis technology, the raw material cost advantages in AEA route will disappear. And if China implements stricter environment discharges regulations, the gap of environmental expenditure between AEA route and IDA route will be broadened.

Nevertheless, CCM International predicts that AEA route will still dominate China’s market in the future three years. Now three of China’s top five glyphosate manufacturers, including Zhejiang Wynca, Sichuan Fuhua Group Co., Ltd. and Zhejiang Jinfanda Biochemical Co., Ltd., adopt AEA route with total capacity over 230,000/t (capacity in their subsidiaries are also included). These companies have strongly comprehensive competitiveness and are unlikely to be phased out during the market competition.

More details and in-depth analysis about comparisons in different route and their development trends, please pay attention to CCM International’s report Opportunities Derived from Global Glyphosate Industry to be published in April 2011.

■ Price Analysis

AEA route to remain dominance in future 3 years

Glyphosate price keeps stable in January 2011

In mid January 2011, average ex-works quotation of the Chinese glyphosate

technical is USD3,493/t (RMB23,000/t), down 1.29% over the previous month. Glyphosate formulations see small fluctuation, 62% IPA and 75.7% WSG enjoy slight increase whereas 10% SL and 41% IPA see small decrease.

The prices of glyphosate products are still undervalued, and the operating rate of glyphosate technical in China is very low (less than 30%). It’s investigated by CCM International that many glyphosate technical manufacturers have stocks and

could supply products on the instant. The low price of glyphosate products also reflects the stagnant market in overseas countries at present, as the corresponding period before had been the peak season of glyphosate demand and hence the price uptrend. Affected by the downstream glyphosate, key raw materials also keep relatively stable in January 2011. DEA price and glycine price maintain the same as the previous month, whereas IDAN price sees slight increase because of the relatively tight supply of natural gas in the cold

season at present. It’s predicted that glyphosate price will keep stable and the low operating rate will continue in the following month, as the glyphosate transaction will decrease and the more production lines will be suspended during this period due to the Chinese Spring Festival Vacation. In the long term, Chinese glyphosate will see significant increase compared with current level because of the increasing cost in manpower and environmental expenditure.

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As of 17 January 2011, there are 128 active registrations of

glyphosate technical, 464 of glyphosate single formulations and 25 of mixed formulations.

■ Glyphosate technicalThe 128 glyphosate technical registrations are held by 127 companies including 6 foreign companies, namely Nufarm, Monsanto, Syngenta, Agrolex, Excel, Malaysia Crop Care. Zhejiang Wynca Chemical Industrial Group Co., Ltd. owns two registrations, namely 95% glyphosate technical and 95.5% glyphosate ammonia salt technical. The 128 registrations consist of 124 registrations of glyphosate acid technical and 4 registrations of glyphosate ammonia salt technical. The popular grade of glyphosate technical registered in China is 95%, and Excel has registered the highest grade with 97%

glyphosate technical.

The 127 registrants are mainly from Jiangsu, Zhejiang and Shandong provinces, which are also the main production areas of Chinese glyphosate.

■ Glyphosate single formulation313 companies hold 464 single formulation registrations in China. The 464 registrations consist of three formulation types, namely SL (soluble liquid salt, including IPA salt and other liquid forms of glyphosate salt), SP (soluble powder), and WSG (water soluble granule), and the proportion of three types are 79.26%, 12.53% and 8.21% separately.

As to the SL formulations, 41% glyphosate IPA dominates the

registration. Among the 367 SL registrations, more than 310 are glyphosate 41% IPA. The second largest SL formulations are 33% glyphosate ammonia salt, constituting about 5% of total glyphosate SL formulations.

As China has banned the registration and production of glyphosate formulations with AI content lower than 30% sine 2010, many glyphosate producers changed their registrations to meet the requirement in 2009, and most of them chose to register glyphosate 41% IPA as the substitution, indicating glyphosate 41% IPA will be the dominant promising glyphosate formulation in China.

There are mainly three contents of glyphosate soluble powder, namely 50%, 30%, 65%, and glyphosate 50% SP takes up 51.72% of the soluble powder.

■ Registratioin

Glyphosate 41% IPA dominates China’s glyphosate registration

TABLE 2: Price of glyphosate products and key raw materials, January 2011

ProductsJan. 2011 Dec. 2010 Price change

MoMUSD/t RMB/t USD/t RMB/t

Yellow phosphorus 2,227 14,700 2,269 15,100 -2.65%

DEA 1,970 13,000 1,954 13,000 0

Glycine 1,899 12,500 1,878 12,500 0

IDAN 1,914 12,600 1,833 12,200 3.28%

Glyphosate formulation

10% SL 661 4,350 676 4,500 -3.33%

41% IPA 1,853 12,200 1,848 12,300 -0.81%

62% IPA 2,248 14,800 2,208 14,700 0.68%

50% SP 2,293 15,100 2,298 15,300 -1.31%

75.7% WSG 3,676 24,200 3,605 24,000 0.83%

Glyphosate technical (95%) 3,493 23,000 3,500 23,300 -1.29%

PMIDA 2,066 13,600 2,028 13,500 0.74%

Note: 1) Prices are monitored on January 14, 2011.

2) Price change is computed by RMB quotation.Source: CCM International

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■ Export Analysis

TABLE 3: Export volume of glyphosate products, November 2010

ProductExport Volume, tonne Change

Nov. 2010 Oct. 2010 Nov. 2009 MoM YoY

Technical 12,647 13,351 19,112 -5.27% -33.83%

PMIDA 2,922 3,294 3,281 -11.29% -10.94%

Formulation 21,715 17,636 14,409 23.13% 50.70%

Note: Volume of formulation is the total of 41% IPA, 62% IPA and 75.7% WSGSource: CCM International’s Glyphosate Export Analysis Report

TABLE 4: Export prices of glyphosate products, November 2010

ProductExport Price, USD/kg Change

Nov. 2010 Oct. 2010 Nov. 2009 MoM YoY

Technical 3.13 3.11 2.83 0.64% 10.60%

PMIDA 1.83 1.89 1.69 -3.17% 8.28%

Formulation 1.89 1.85 1.60 2.16% 18.13%

Note: Price is the average round valueSource: CCM International’s Glyphosate Export Analysis Report

Glyphosate export price uptrend continues in November 2010

■ Export volumeChina has exported 12,647 tonnes of glyphosate technical and 21,715 tonnes of glyphosate formulations in November 2010, maintaining the same level as the previous month. Glyphosate technical export suffered sharp decrease while glyphosate formulation enjoyed great increase compared with the corresponding period of last year, indicating the increasing acceptance of Chinese glyphosate formulations and increasing proportion of glyphosate formulations exports.

■ Export PriceChina has exported 12,647 tonnes of glyphosate technical and 21,715 tonnes of glyphosate formulations in November 2010, maintaining the same level as the previous month. Glyphosate technical export suffered sharp decrease while glyphosate formulation enjoyed great increase compared with the corresponding period of last year, indicating the increasing acceptance of Chinese glyphosate formulations and increasing proportion of glyphosate formulations exports.

■ DestinationAccording to CCM International’s Glyphosate Export Analysis Report, 30 countries (or regions) have imported Chinese glyphosate technical and 54 countries (or regions) have imported Chinese glyphosate formulations in November 2010.

Argentina, Indonesia, Australia and Malaysia are the top four importers of Chinese glyphosate technical in November

As to the glyphosate soluble granule, there are a variety of contents including 77.7%, 75.7%, 88.8%, 70%, 68% etc., with glyphosate ammonia salt being the registered AI. The solid glyphosate with high AI content has the advantage of convenient application and transport, but its actual effect is lower than glyphosate IPA when compared at the same dosage.

■ Glyphosate mixed formulation

There are 25 active glyphosate mixed formulation registrations in China at present, which are owned by 22 companies. MCPA-sodium is the popular herbicide to be mixed with glyphosate. Dicamba, acetochlor, etc. are also used to mix with glyphosate. The mixed

glyphosate formulation can heighten glyphosate’s control effect and shorten the time to onset. Now the mixed glyphosate is becoming a popular method to solve the problem of weed’s increasing resistance to glyphosate.

2010, with total import volume of 7,882 tonnes, taking up 62.33% of China’s total export this month. Australia, Nigeria, Vietnam, Thailand and Indonesia are the top five importers of Chinese glyphosate formulations. Total export volume of glyphosate formulations to the five countries was 14,411 tonnes in November 2010, constituting 66.37% of the total.

In November 2010, China has exported PMIDA to three countries namely Argentina, India and Brazil, with volume of 2,007 tonnes, 900 tonnes

and 15 tonnes respectively.

■ ManufacturersThese glyphosate products exported in November 2010 were manufactured by more than 22 producers. According to CCM International’s analysis, Zhejiang Wynca Chemical Industrial Group Co., Ltd., Nantong Jiangshan Agrochemical & Chemicals Co., Ltd., Jiangsu Taicang Pesticide Factory Co., Ltd. and Sichuan Fuhua Group Co., Ltd. were the top four exporters of Chinese glyphosate technical in November 2010, with total volume of over 6,800 tonnes.

CCM International Limited www.cnchemicals.com

Glyphosate China Monthly Report Vol. 3 Issue 01, 2010

8

FIGURE 1: Destinations of Chinese glyphosate technical, November 2010

Source: CCM International

Argentina, 19.10%

Indonesia, 16.88%

Australia, 16.65%Malaysia, 9.70%

Guatemala, 6.48%

Uruguay, 5.69%

S. Africa, 5.38%

Others, 20.12%

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