2017 is a year of transformation of the agricultural industry, facing the complex and changeable agricultural market, many agricultural operators to stay on the sidelines. Brazilian pesticide products rely heavily on the Chinese and Indian markets, so any restrictions in Asian countries will affect the price of Brazilian pesticide products. China as the world’s largest raw drug, intermediate production and export countries, relevant regulatory policies will affect the production chain, the impact on product prices can not be overlooked.
The implementation of the Government’s environmental policy has restricted the production of pesticides and intermediates in some areas. The environmental pressure faced by the production enterprises leads to the increase of the production cost of pesticide products, and it is not uncommon for new factories to be unable to operate because of the above reasons.
Accidents are also one of the reasons why factories shut down. December 10, Jiangsu Province, a synthetic 2,4-d intermediates-two chlorobenzene factory explosion occurred, factory shutdown, 2,4-d supply tension intensified. In addition, many companies began mergers and acquisitions, designed to increase the complementary product mix, through cooperation to expand the scale, reduce costs, eliminate competition, resulting in higher product prices.
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At present, the operation of the plant is full production, and limited supply of some products, priority for long-term cooperation, lower credit risk of the main customers supply. Among them, 2,4-d this product price continues to move higher, the supply tension situation intensifies. This article takes the product of 2,4-d as an example to analyze the price trend of Brazilian pesticide products.
Herbicide 2,4-d is used to control broadleaf weeds, such as Morning Glory or five claw jinlong, American brocade grass, Huang, spit root tincture, bitter lactuca vegetables and other weeds, such as the annual daisies and other difficult to control weeds, in the United States 2,4-d also be registered for controlling weeds.
The product has been commercially promoted as an agricultural herbicide since 1945, and 2,4-d is a broad-spectrum herbicide with high cost performance. Glyphosate resistant weeds, sulfonylurea herbicides (chloro-sulfonyl, clopidogrel, methyl-sulfonate), nicotinamide and Imidazoline herbicides (weed-killing, methyl-Mi-cao, glyphosate-resistant, MI-Cao, and methoxy-smoked) are effective in resisting weeds, which make 2,4-d one of the most commonly used herbicides in the Brazilian region.
In Brazil, the first commercially available 2,4-d product is the market-leading producer of Dow Dma806sl. As many as 66 products containing the active ingredient of 2,4-d, the most common product is 806g/l2,4-d dimethyl amine; 2,4-d and glyphosate and toxic mixed products, This product is used only for pasture. This year, the Brazilian Ministry of Agriculture passed the enlistduo of another product of Dow Yi Nong.
If the average price of imported 2,4-D806G/LSL from the United States was taken as a reference in January 2017, 100%, as can be seen from the table above, the prices of imports from Argentina and China were 56% and 29% per cent higher (FOB). Due to seasonal restrictions on herbicide use, the herbicide was not imported in February-May. June-September, the product was imported only from China.
Imports of products in June fluctuated more, with price increases reaching 40% to 43%. Prices in August and September rose by as much as 47%-57%.10 months, Brazil began importing imports from India, and the price of imports from India in October and November increased by 29% to 37%, while imports from China rose by more than 47% to 49% per cent, in contrast to the U.S. import price of imports reduced by 5% .
If the average price of imported 2,4-d97% drugs from the United States was taken as a reference in November 2016, set at 100%, an analysis of import prices for the November 2016-November 2017 period, it is easy to see that most of the imported products are cheaper. Among them, the price of 2,4-d raw drugs imported from China is 6% to 22%, and the prices of Austrian and Indian products are 2% and 9% lower than those in the United States.
In the 11 months of 2017, the import price of an importer from China in January and the price of a product imported from Argentina for 11 consecutive months were 2% to 8% higher than the reference product, and the price of operating through other ports was lower than the reference price of 23%, or the same price as the reference product.
July 2017-September imports from the United States of products, its price than the reference products declined 9%-10%, Argentina 7-8-month import prices than the United States 16% higher. Imports from China, depending on the importer/exporter, the price varies greatly, up to 25% lower than the price of the reference product.
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2,4-d is not the only imported product with rising prices. The Allierbrasil consultancy surveyed more than 70 pesticide products imported from Brazil, and found that most of the offshore prices of imported products had risen sharply. Product price increases directly affect the Brazilian distribution chain, distributors should select suppliers and business partners. According to Cropfield/solus’s Andersonfaustino, the company’s competitive advantage lies in its proximity to sales channels and pesticide producers.
If the price of pesticide in China continues to rise, it will have a big impact on Brazilian agriculture, a huge challenge for local distributors, and a huge surprise to empty inventories.