LONDON, Oct. 12, 2016 /PRNewswire/ -- In H1 2016, China's pesticide industry showed some improvement, with slight YoY rises in total assets, total revenue and total profit within the industry reported.
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China's pesticide industry improves slightly in H1 2016
In H1 2016, despite China's pesticide industry remaining depressed, small YoY rises in total assets, total revenue and total profit were reported.
According to the National Bureau of Statistics of the People's Republic of China (NBS), in H1 2016, total revenue from pesticide enterprises' primary businesses amounted to USD24.60 billion (RMB163.03 billion), while industry profit totaled USD17.24 billion (RMB114.28 billion), slightly up 5.40% and 4.70% respectively YoY. Specifically, total profits from biochemical and microbial pesticides rose by 27.40% YoY, vs. chemical pesticide TC by 2.20% YoY . Obviously, sales of biochemical and microbial pesticides were far greater than those of chemical pesticides, and made a much larger contribution to the entire pesticide industry.
In recent years, biochemical pesticides have garnered more attention from the industry, and new products have been continually introduced and promoted, due to the aim of zero growth in the use of chemical pesticides in China as well as pests' increasing resistance to chemical pesticides. Biochemical pesticides are predicted to become more popular in the near future, but since the biochemical pesticide market is far less developed or mature than the chemical pesticide market, chemical pesticides are widely expected to maintain their position as leading products in the crop protection market.
Structural adjustments to the international economy and falling grain prices around the world have weakened the demand for pesticides, which has in turn dragged down Chinese imports and exports of pesticides. Year 2015 witnessed falls in both imports and exports from China's pesticide industry for the first time, and this trend continued into H1 2016. In the meantime, as China continues to aim for zero growth in the use of chemical pesticides, stricter environmental requirements and strengthening safety supervision, the domestic pesticide industry faces significant change. For example, the new Regulations on the Control of Agricultural Chemicals is to be implemented soon, which will greatly affect the pesticide industry.Structural adjustments to the international economy and falling grain prices around the world have weakened the demand for pesticides, which has in turn dragged down Chinese imports and exports of pesticides. Year 2015 witnessed falls in both imports and exports from China's pesticide industry for the first time, and this trend continued into H1 2016. In the meantime, as China continues to aim for zero growth in the use of chemical pesticides, stricter environmental requirements and strengthening safety supervision, the domestic pesticide industry faces significant change. For example, the new Regulations on the Control of Agricultural Chemicals is to be implemented soon, which will greatly affect the pesticide industry.
Production and sales by domestic pesticide enterprises were influenced by serious overcapacity, insufficient market demand, fierce competition, and low product prices in the industry. According to H1 2016 financial reports released by a number of listed pesticide enterprises, most suffered YoY falls in revenue and profit, and some even made losses.
So far this year, prices of glufosinate-ammonium, paraquat TK, and dicamba have fallen by more than 50%, 45% and 30% YoY respectively.
Notably, in H1 2016, the number of pesticide enterprises at loss declined by 12.10% YoY and the loss by value was USD73.33 million (RMB486 million), down 17.60% YoY. The loss by scale (=number of enterprises at loss / total number of enterprises) declined by 1.35 percentage points YoY.
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