Vice president of Qingdao Hansen talked about future trends in the pesticide formulation industry

Zeng Xianfeng, vice president of Qingdao HansenBiologic Science Co., Ltd (Qingdao Hansen), published an article in Pesticide Market News (a journal sponsored by the China CropProtection Industry Association) in Oct. 2023, discussing the current status andfuture trends of the pesticide formulation industry.

1.Overview of the development status of thepesticide formulation industry

1.1.    Pesticide innovation is increasingly difficult,and the integration of seeds and pesticides will be the general trend

For the R&D of new pesticides, according to internationallyrecognized statistics, the development of an active ingredient with a novelstructure takes an average of 11.3 years from the first synthesis to listing.With the increasing requirements for pesticide applications, the difficulty ofdiscovering new ingredients has increased significantly, and more time isneeded for new product development. The slowdown in the listing of new activecompounds caused many leading enterprises to adjust their business strategiesand R&D focuses, shift R&D expenses to seed traits, and closely combinepesticides and seed industries for development.

1.2.   Patentedproducts still dominate the market, but there is a trend of diversification ofpatented products

Multinational corporations strengthen marketmonopoly by promoting new product mixtures of patented compounds; in terms of formulationpromotion, diversity replaces stability, and continuous adjustment and changeof products have become the main theme of the market. Multinational companiesare committed to developing novel mixtures that strike a balance betweenpatented and generic products.

1.3.   Pesticidformulation enterprises are in a more difficult situation than innovative pesticideTC enterprises

At present, many pesticide formulation enterpriseslack core competitiveness and will face a difficult future due to the hypercompetition of prices caused by the homogenization of products. On thecontrary, the innovative enterprises will have a promising future because oftheir own core competitiveness, though the early stage will be very difficult.

1.4.   Thedemand for green development in China’s agricultural modernization has givennew opportunities to pesticide formulation enterprises

²   Policy-driven:For example, biological breeding technology brings new opportunities to someproducts, green prevention and control of crop diseases, insects and weedsbrings new opportunities to soil health management , and intelligentmanufacturing of pesticide formulation promotes the transformation andupgrading of enterprises, etc.

²   Demand-driven:With the increasing demand for safe and efficient formulation products, theimprovement of precision application technology, light and simple cultivation technologyas well as resistance management will also have a certain impact on the futureformulation market.

1.5.   Competitor-levelchanges

Large enterprises consolidate their advantagesthrough the integration and extension of the industrial chain, mediumenterprises strengthen channel construction through developing markets inlower-tier cities, and small enterprises strengthen their characteristicsthrough formulation innovation and optimization. At present, the concentrationof conventional product resources in large enterprises is accelerating, highlightingthe advantages of the industrial chain. In addition, the innovation of productportfolio and promotion programs is accelerating, and the trend of channeldiversification is more significant, so it is the future industry trend topromote the circulation and integration of registration resources amongenterprises.

1.6.   Thedevelopment of global biopesticides is a hot topic

In recent years, foreign companies are graduallyaccelerating the R&D, registration and listing of biopesticides. Chineseofficials are also encouraging the research and development of microbialpesticides and plant-derived pesticides.

1.7.   Theimplementation of the action plan for the reduction of chemical pesticides hasa great impact on the pesticide industry

The Ministry of Agriculture and Rural Affairs hasissued the “Action Plan for the Amount Reduction of Chemical Pesticides by2025”, which mentions that by 2025, the use of chemical pesticides in rice,wheat and corn will be reduced by 5% and by 10% in fruit and vegetable tea;low-activity and high-dosage products will be eliminated; strengthen theresearch and development of green pesticides; enhance the original innovationof low-risk chemical pesticides, and promote the creation and upgrading ofpesticides; encourage the innovative application of nanotechnology in pesticideformulations. The implementation of this plan will inevitably have a greatimpact on the industry.

1.      A briefanalysis of pesticide trends by categories

1.1.   Developmenttrends of insecticides and acaricides

Currently, the main problems during domestic pest control are as follows:

The first one is drug resistance, especially the riceborer, rice planthopper, vegetable thrips, diamondback moth, and citrus spidermite, which have all developed resistance to major control chemicals;

The second one is the lack of structural chemicals.There are few registered chemicals for some small crops, which makes it easy tobe judged to contain pesticide residues or exceed the standard in pesticideresidue testing;

The third one is the toxicity to natural predators andenvironmental organisms, mainly focusing on the toxicity of nicotine to beesand amide pesticides to aquatic organisms.

It is worth noting that the development of geneticallymodified anti-insect technology has led to a decrease in the use of pesticides,especially the rapid advancement of anti-noctuid pest technology on corn,soybeans, cotton, and rapeseed, which has led to the development of products bydomestic formulation enterprises in recent years to focus on small-scale pests.

In the list of first-class crop pests released inChina in 2023, there are 10 major pests, including Spodoptera Frugiperda,migratory locusts, meadow borers, armyworms, rice planthoppers, rice leafrollers, stem borers, wheat aphids, Asian corn borer, vegetable thrips, whichwill become hot spots for enterprises to register projects in the next step.

The continuous creation of amide pesticides is leadingthe development of future pesticides. After fipronil was banned, pesticidesrepresented by amides such as chlorantraniliprole, cyantraniliprole,tetrachlorantraniliprole, tiorantraniliprole, and cyhalodiamide led thedevelopment of insecticide products. The application scope of amide pesticidessuch as broflanilide, tetraniliprole,cyproflanilide, and flubendiamide is gradually expanding to more crops.

Chlorantraniliprole has become a popular insecticidepursued by many companies. After its patent expired, the annual productioncapacity of domestic technical projects that have been built or are underconstruction exceeds 10,000 tonnes.

The development of acaricides is slow with fewvarieties, and it is increasingly difficult to develop new compounds. There arecurrently more than 2,000 registered acaricides in China, with only more than30 active ingredients, and most of them are old compounds. The Chinese marketcapacity is about USD99.0 million with the very serious problem of producthomogeneity. The research and development speed of new compounds have been far behindthe rate at which resistance is being generated.

1.2.   Fungicidedevelopment trends

Overall, it is expected that the number of fungicidevarieties on the three major staple food crops will increase in the future, andthe market share will increase. Socialized services have driven an increase inthe demand for staple food fungicides. In addition, with the promotion andapplication of straw turnover and no-till technology, underground root diseaseshave worsened year by year, and the market demand has become increasinglyurgent for soil disinfection products and seed treatment agents.

Epidemic diseases (such as rust, scab, etc.) are mostlikely to develop resistance to systemic fungicides. As the incidence of the nationalfirst-class crop diseases, wheat scab and southern corn rust, has intensified,the pesticide products used to control them can be included in the nationalgovernment procurement scope of “one spray for three preventions” and “oneprevention, two reductions” respectively.

While the new varieties independently developed inChina such as zinc thiazole, phenamacril, dufulin, coumoxystrobin, and benzamide comealong, the overall promotion and application are not very successful. Therelatively successful zinc thiazole has annual sales of approximately USD41.8million, and phenamacril of approximately USD13.9 million. In particular,Syngenta’s pydiflumetofen series products achieved an annual sale in China of USD111.4million in 2022.

High-efficiency varieties such as oxathiapiprolin and pydiflumetofenare leading the development of fungicides. Other azoles, such as prothioconazoleand other new fungicide varieties, have also developed rapidly in recent years.

Fungicides are growing significantly in the seedtreatment product market. The product sales were USD137.6 million in 2010 andreached USD526.2 million in 2021.

There are few varieties of fungicides for preventingand treating bacterial diseases and they are outdated. There are currently morethan 100 relevant registered products, involving 32 active ingredients. Excludingmicrobial fungicides, they are mainly a mixture of copper agents andagricultural antibiotics, which are highly homogeneous. There is a lack of safeand environmentally friendly fungicides on the market that do not easilyproduce resistance and can effectively prevent and control bacterial diseases.

1.3.   Herbicidedevelopment trends

According to the author’s statistics, a total of 20new herbicide varieties were newly approved around the world from 2012 to 2022,coming from Germany, the United States, Japan, and China.

The continuous expansion of the global plantingarea of genetically modified crops will have a greater impact on the structureof pesticide varieties. As corn, soybeans, rape, and other geneticallymodified crops are expected to be gradually opened to commercial cultivation inChina in the future, the planting area of glyphosate- and glufosinate-ammonium-resistantgenetically modified varieties is likely to expand in the next 3-5 years, whichwill greatly drive the sales of glyphosate and glufosinate-ammonium, and selectiveherbicide enterprises will face great challenges.

Corn-soybean strips pose challenges for some weedcontrol and opportunities for some herbicide varieties. In 2023, 1.33 million hectares of corn-soybean strip compoundplanting has been promoted in the Huang-Huai-Hai, northwest, and southwesternregions. However, the weed control problems caused by corn-soybean stripcompound planting also need to be solved urgently. The main herbicide varietiescurrently registered in soybeans and corn categories are acetochlor, S-metolachlor,thifensulfuron-methyl, 2,4-D-ethylhexyl, flumetsulam, bentazone, pendimethalin,etc.

Weed resistance in farmland is becoming increasinglyserious, and effective solutions are urgently needed, including resistantbarnyardgrass and stephanotis in rice fields, and resistant wild oats,wheatgrass, and ryegrass in wheat fields. Controlling these resistant weeds isa top priority for enterprise research and development.

Labor-saving formulations of herbicides in rice fieldswill be the future development trend. Labor-saving formulations of paddy fieldherbicides such as granules, large granules, effervescent tablets,film-spreading oils, floating granules, etc. solve the pain points of weedcontrol in paddy fields and meet future market development needs. They will bethe direction and focus of corporate research and development.

1.4.   Developmenttrends of plant growth regulators

Leading companies in plant growth regulators began toemerge, dominated by Sichuan, Henan, Jiangxi, Shaanxi, and other places. SichuanGuoguang Agrochemical Co., Ltd. currently holds a total of 124 plant growthregulator registration certificates, becoming a leading company in this field.

Functional plant growth regulator products arebecoming more popular in the market. For example, whenthe rainfall increases, it is necessary to use the vigorous growing controlproducts paclobutrazol, trinexapac-ethyl, and prohexadione calcium; under low-temperatureconditions, the rooting products need to be used including indole butyric acid,naphthalene acetic acid, sterol homologues, etc.; off-season fruits andvegetables need the coloring product jasmine acid, inducer, etc.

With the continuous deepening of research andapplication of plant growth regulator products, stress resistance inductionplays an increasingly important role in agricultural production. For example,BASF’s myconazole+mepiquatchloride can change the plant shape, promote root developmentand increase yield in rapeseed, and Arysta’s tetraconazole+hypersensitiveprotein can control or inhibit diseases of soybeans and corns.