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Pressured by environmental policy, quotations of prochloraz formulations increased in terminal market

"The prices of prochloraz formulations have increased to different extent in mid- and down-stream markets where there are distributors and retail sale stores of agricultural means of production (AMP). The extent differed, based on the inventories and the price strategies carried out by different producers;" found a reporter from Nanfang Rural during his interview in mid and late May 2018, "This is mainly because Jiangsu Huifeng Agrochemical Co., Ltd., a key producer of prochloraz technical, was ordered by the administration to suspend production for rectification."


"A rise of around USD625.4/t showed in 25% prochloraz, and USD938.1/t in 45% prochloraz," said a AMP distributor in Guangdong Province, "Since May, an agrochemical enterprise has increased the price of its prochloraz EC which is one of our agent products by over 10%."


"The prices of our products namely prochloraz formulations from Jiangsu Rotam Chemistry Co., Ltd. and Beijing Mindleader Agroscience Co.,Ltd. have started growing since early 2018. However, the increase so far has not yet surpassed 5%," disclosed Zhou Yichu, General Manager of Guangxi Fulong Fruit Co., Ltd., "Recently we have been informed that their quotations were increased. Fortunately, we stocked up on such products early this year. Whether the transaction prices will increase remains to be seen."


"Prochloraz performs well in the prevention and control of citrus anthracnose," stated Li Haiming, General Manager of Guangxi Ailiao Agrochemical Co., Ltd., "It is used in large quantities in the orange producing area of Guangxi Zhuang Autonomous Region, especially in the rainy days in spring and summer when the disease strikes frequently. The mixing of prochloraz with other fungicidal active ingredients is a common way to prevent and control the disease."


In regard to the rise in prochloraz price, Li Haiming said, "It takes a certain period for the growth to move from pesticide technical to terminal pesticide market. Besides, different areas may be different, impacted by the channels and the inventories. For example, we have not yet received the notice about price increase from Huizhou Yinnong Technology Co., Ltd., one of our prochloraz suppliers."


The price changes in terminal pesticide market is always later than that in upstream pesticide technical. Since September 2017, 97% prochloraz TC has grown in a frequent way: the figure was USD9,850/t in early September 2017 and was USD17,198/t in May 2018. The rise just paused during the Spring Festival holiday; since March it has re-increased, by 25%+ as of May. Hence, it is no surprise that the downstream market now is pressued by such a rise which has lasted for over 8 months.


Since April 2018, many provinces such as Jiangsu, Shanxi and Henan have been reported or exposed by the the Ministry of Ecology and Environment of the People's Republic of China and China Central Television about their problems in environmental protection. A new round environmental inspection is now facing the chemical industry. The chemical industrial parks and zones have been asked to suspend production for rectification, which is a great pressure exerted on the supplies and prices of pesticide technical and pesticide intermediates. Though there are certain inventories, it is unpredictable that how long it will take for the producers t0 resume production. Under this, the quotations in terminal market has been increased recently by the distributors who are worried about the future supply.


Figure 7: Ex-works price of 97% prochloraz TC in China, November 2017-May 2018


Source: Think Real