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Will High Price Imported Pesticide Face Any Policy Risk (20130813)

Will High Price Imported Pesticide Face Any Policy Risk (20130813)

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Published by: CCM International Limited on Aug 22, 2013
Copyright:Attribution Non-commercial


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Will high price imported pesticide face any policy risk?
The prices of the imported pesticide are on the rise in the recent years. Will thiscontinued price rise face any policy risk?
imported pesticide, imported commodities, price rise, price control, policy riskRecently, the Chinese government has been closely monitoring the price variations in theimport commodities, such as milk powders and medicines, with a view to protect the commoncitizen against unfair prices. In recent years, the price of imported pesticide has risenabnormally. Will this continuing price rise face any policy risk?Price variations have an influence not only on people's life, but also on national stability. Thus,the government has the responsibility to take steps against price rise when the price has risenat unacceptable rates. Over the past years, the prices of imported commodities, such as milkpowders, cars and medicines have soared leaving consumers puzzled. Finally, the Chinesegovernment had to take steps against price rise, giving most of the foreign companies asevere hit.Lately, the market share of imported pesticide is on the rise, so does the price. As a result,price rise of imported pesticide has become farmers' burden. Under this situation, if the price of imported pesticides increases again, will the government try to regulate?It is believed that the government of China would not take any measure for price control of these imported pesticides in the near future.Firstly, compared with the industries mentioned above, domestic pesticide market is very small,whose annual sale is only around USD8.1 billion to USD9.8 billion. It's quite reasonable,pesticides are a kind of product specifically for specific people--the farmers, and the smallaggregate demand determines its low impact on people's daily life in a short term. Additionally, domestic pesticides would be the back-up choice to hit back the rising price of imported pesticide. China is the biggest producer of pesticide in the world. If farmers don't likeimported products, they can choose the much cheaper homemade products.On the other hand, the imported pesticide is well received by farmers. Presently, the marketshare of domestic pesticide has been declining year by year; conversely, the amount of theimported pesticides is rising. According to the data from China Customs, totally 35,639 tonnesof pesticides have been imported from January to May in 2013, up by 6.9% compared to thesame period in 2012. Even though the price of imported pesticide is rising, some farmers or agencies prefer the high price imported pesticide rather than the domestic pesticide, theimported pesticide is accepted by more and more farmers at the moment.There are multiple reasons for this. Firstly, the imported pesticides are believed to be more
environmentally friendly and the low toxicity and pollution-free features make them easilyaccepted by the market. Besides, the most important point is that the imported pesticides showfarmers better performance than domestic products, which can help farmers to lower the labor cost and to ensure the output.However, the farmers suffer from the high prices. The high prices of these imported pesticideswill directly increase their planting cost and decrease the profits. The continued price rise of imported pesticides will ultimately make the consumers pay higher prices for agriculturalproducts. Furthermore, the continued high price of pesticide may reduce the farmers'enthusiasm.So, if the price rises unfairly, it is possible that the Chinese government will take measures tobring imported pesticide prices under control. Threat to the national food security is the lastthing the Chinese government wants to see.In fact, many local governments issued policies to crack down the high price of rice seed,when some companies raised their rice seed prices. This may be repeated in pesticidesindustry as well.Source: Insecticides China News 1308 issued by CCM. 
Table Contents of  Insecticides China News 1308: 
Shanghai port prices of major insecticides in August 2013Ex-works prices of major insecticides in August 2013FOB Shanghai prices of major insecticides in August 2013Shandong plans to build 2 new pesticides projectsOutput of insecticide increases by 2.20% YOY in June 2013China's imidacloprid export continues to surge in the first four months this year Will high price imported pesticide face any policy risk?Jiangsu Changqing achieves good operating performance in H1 2013Full implementation of new pesticide policy in Hainan Province finally comes trueGuangzhou Lonkey to buy 25% shares of Qiheng Agro-chemicalBrief registration overview of China's microbial insecticidesTotal profit of China's chemical pesticide industry up 48.2% YOY in Jan.-May 2013Noposion to delay resumption of tradingLanfeng Biochemical to establish an import and export companyHuifeng Agrochemical's net profit up 54.52% year on year in H1 2013Lier Chemical enjoys double-digit rise in revenue and net profit in H1 2013DuPont takes multi-product strategy for chlorantraniliprole in ChinaChina to strengthen management of neonicotinoid insecticidesHubei Jinhaichao firstly achieves the registration of molluscacide
4 enterprise with pesticides business get into 2013 China’s top 500 enterprises
Indoxacarb TK is registered twice in July 2013
Sinochem agro actively expands overseas pesticides market

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