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Environmental policies: How Chinas pesticide exports get affected

2018/5/2 15:36:14

On the whole, China's environmental protection policies affect China's pesticide exports mainly in terms of export volume and export prices. Under the severe environmental protection policies, manufacturers of China's pesticide and its raw material are restricted in production. In the case of declining output, the domestic market has experienced a tight supply of pesticide, leading to the rising ex-works prices of pesticides and their main raw materials.

Environmental regulations have posed significant impacts on domestic pesticide industry in 2017. China's environmental policies always work well in regulating the market. Stringent administration helps cut out small-sized or even unlicensed producers and favours the development of leading enterprises.


Pesticide exporters have expressed that there is no obvious advantage in export prices nowadays compared to the past, and export volume of pesticides has generally decreased correspondingly. Especially in the second half of 2017, export prices of pesticides have risen significantly due to environmental pressure and would continue to rise. In December 2017, the export volume of China's pesticides was decreasing by 7.44% year on year, while the export value reached increased by 22.14% year on year. In the same time, both pesticide technical and formulations witnessed dropping export volume year on year, but the former had a larger declining range, and they enjoyed climbing export value and export prices. Specifically, the export volume of plant growth regulators increased significantly, but that of insecticides and fungicides showed a relatively large decline; however, the export value of insecticides and fungicides grew the most.


According to trade analysis firm Tranalysis, the export volume of the five major pesticides 2,4-D, glyphosate, acetochlor, chlorpyrifos and azoxystrobin did not clearly reflect the impact of environmental protection policies on their exports, which was reflected obviously in the FOB price, however. Specifically, the FOB prices of these five pesticide products showed significant increases in the second half of 2017. This is related to the fact that the Chinese government has strengthened the environmental supervision during that period.


Leading enterprises in this industry are going to have more power in the market as environmental inspections and safety inspections become a normal routine in the foreseeable future. The main advantages of large pesticides enterprises are the self-sufficiency in raw materials and the resulting independence of market voluntarily, the implementation of new national standards for pesticides to fight fake and counterfeit products, as well as big overseas markets with growing demand and already existing clients.


About the article

The information for this article comes from Tranalysis, one of China’s leading market intelligence provider for import and export data.


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