The highlight of China Glufosinate Supply (Video)

Video Link

If you only focus on China Glufosinate supply, please feel free to watch from 9’50”.

Market Overview

Glufosinate is always a hot topic for global distributors especially when the Paraquat was banned in some countries, like China, Vietnam, and Brazil. The market gap had to be fed by the new portfolio. Since Glufosinate is booming to be an alternative choice for global farmers, it is more and more important as non-selective herbicides for burn-down and weed resistance controlling. 

Before we talk about the Glufosinate supply. We have to mention the weed resistant issue in advance. There is a clear sign that the resistance of Glyphosate, 2,4-D, dicamba becomes more serious than before. Obviously, t is the driver to introduce high efficacy herbicides into the market. 

In the US and LATAM, the weed resistant issue is very serious since the GMO seed promotion in such territories for decades. The more and more agrochemical input increased many times during the past twenty years.

According to the article on the website of MidWest Center, written by Johnathan Hettinger, there are two suggestions to face such weed-resistant challenge. One is that, the cropping system would be more benefited by switching to crop rotations, more biodiversity on the farm, and increased soil health. On the other hand, there was a study to show that, using multiple herbicides to kill weeds is better at delaying resistance than switching from one herbicide one year to a different the next.

In the article, they mentioned that the weeds are quickly outpacing technological developments. Basically, Herbicides work by targeting a specific mechanism in a plant and disrupting that mechanism. But increasingly, plants have started to develop metabolic resistance, which is when the plant’s internal mechanisms are able to metabolize herbicides into non-toxic products, making them ineffective. The mechanism is similar to crops that are able to sustain being sprayed by herbicides. The WEED is learning from the GMO Seed to survive from herbicides. What an incredible nature!

This phenomenon is often called “the pesticide treadmill” - as more weeds develop resistance to more herbicides, new and better herbicides are needed. If you show interest in such content, you can visit the link to check the article on the website of MidWest Center.

Of course, I am not arguing the GMO development. The controlling on the weed resistance would bring the long-term growth of the global Glufosinate market. Recently The Bayer’s new GMO corn seed is designed to be sprayed with up to five herbicides. It could represent the future of farming, providing growers with more pesticides to combat the problem of weed resistance. 

“It’s not a big revolution. It’s the way things are moving,” I agree with such a comment. And what can be sure is new GMO seed technology can be expanded into soybean in near future. Since it could be a workable way to delay weed resistance. Soybean is the critical protein crop with strong demand from the world’s 2nd largest economy, China. The weed resistance control in Soybean will be also very important to maintain the income for global growers.

 If we go through the global key GMO seeds, Glyphosate, 2,4D, and Dicamba are the key products. Bayer (Previous Monsanto)’s Roundup Ready 2 Xtend® and Corteva’s Enlist are the key competitors in the market. 

Here I would like to highlight Corteva’s sustainable crop protection. Because it is a fundamental concept for future agrochemical portfolios. It also inspired me when I work together with China National Pesticide Formulation & Adjuvant Laboratory, China Agricultural University.

Corteva’s strategy is aiming at sustainable agriculture. The important thing of sustainable crop protection is to decrease the dosage with high efficacy and low toxicity. Green or renewable raw materials can minimize the environmental impact and bring safety to the end-users.  

Corteva emphasized in their GMO seed programs to apply Enlist One and Enlist Duo. They reinvent 2,4-D Choline to reduce the 2,4-D vapor loss and have less eye irritating. The patent brought the longer life value of Coteva’s Enlist Due technology. The drift control and odor reduction also make Enlist Duo safer for the farmers with high stabilization of formulation. 

Enlist portfolio is competitive in the market. For the challenge of global weed resistance, Corteva introduces Glufosinate in their program. With the promotion of Corteva Enlist E3, the Glufosinate portfolio will have good potential.

On the other hand, the key producer of Glufosinate, BASF also have their own trait of Glufosinate GMO seed. In 2017, BASF signed an agreement to acquire significant part of the Bayer seed and non-selective herbicide business. That’s because Bayer intended to divest these assets in the context of its planned acquisition of Monsanto.  The assets to be acquired include Bayer’s global glufosinate-ammonium non-selective herbicide business, as well as its seed businesses for key row crops in select markets.  The transaction also includes Bayer’s trait research and breeding capabilities for these crops and the LibertyLink® trait and trademark. The trait research and breeding capabilities empowered BASF to develop LibertyLink together with their expansion of future Glufosinate portfolio. 

In 2018, BASF launched Credenz with LibertyLink GT27, the first soybean technology with herbicide tolerance to both Liberty herbicide and glyphosate. It is only for post-emergence control of broadleaf and grass weeds. The Credenz LibertyLink GT27 system combines the maximum yield potential with the most effective weed control solutions from LibertyLink. The system can give farmers greater flexibility in weed management.

What great strategy the BASF did was to acquire L-Glufosinate technology from AgriMetis in 2020. The L-Glufosinate will deliver an improved, highly concentrated weed control solution reducing the needed amount of the product by up to 50 percent. Lower dosage also means lower cost. The cost-saving has the possibility to be transferred to global farmers. Because current Glufosinate market price is still higher than the expectation of global farmers for weed resistant control.

Sustainable crop protection solution is a future trend in the global crop protection market. From my point of view, I am looking forward to seeing the novel product of BASF L-Glufosinate in the market. It will become a new leader in the Glufosinate market with strong leadership for the promotion of LibertyLink GMO seeds.

CHINA

Back to China, the Chinese suppliers and Indian manufacturers figured out the potential trend. So there is a lot of investment poured into Glufosinate production.  

According to our China agrochemical Insights, before 2015, the Glufosinate price was always at a high level. The China manufacturers invested a lot in new capacities of Glufosinate. In 2016, Bayer CropScience started to decrease Glufosinate price to face the challenge of new capacities from China. Such defend strategy pushed the price down quickly in 2016 from around 46 USD/Kg EXW to 23 USD/Kg EXW. 

I listed the China Glufosinate 95% price trend. You can easily find out the Glufosinate back to around 30 USD/Kg EXW at beginning of 2018. China’s environment protection audit from 2017 to 2018 made the China supply very tight. It impacted the Glufosinate production in some ways as well. Moreover, the global demand was very strong. So the price increased stably before 2019. 

Competition is the best way to save the cost for consumers. In 2019, the key manufacturers of Glufosinate were competing with each other. It could be mainly because of the trade war and the challenge of the global economy. 

2020 COVID 19 pandemic in China made big pressure on the supply of Glufosinate. Since the COVID19 and environment issue, the supply of key Glufosinate intermediate from Hubei Province was suspended for several months. The market price of Glufosinate increased sharply during the 1st Quarter of 2020. The tight supply and low production rate pushed the Glufosinate price higher and higher in the 2021 season. Up to now, the Glufosinate 95% EXW price reached 28 USD /Kg. 

To clarify the capacity of Glufosinate, I also summarized a list with Key Global Glufosinate Capacity in the Chart. Lier Chemical and BASF are the two key Glufosinate producers in the world. 

Lier has the key advantages of the chemistry process enhancement. For the production of Glufosinate, they developed their advanced process of Glufosinate with relatively lower cost than the traditional Grignard-Strecker Glufosinate process. It is a new kind of continuous reaction. Lier’s process innovation decreased their cost on Glufosinate production. They also have around 3000 mt L-Glufosinate capacity. As you know, if you want to check the producer is good or not, there is a very clear standard. Does such supplier have the upstream’s controlling? Lier is the typical example of such kind strong manufacturers in China with strong upstream control, they control the raw materials and key intermediates.

BASF is holding the Glufosinate asset from Bayer Crop Science. The novel pipeline continuous reaction brought huge cost savings with a high yield rate (90%) and very low waste emission. BASF’s advantage is the upstream collaboration in the Chemical zone. 

Recently BASF also acquired the L-Glufosinate technology with a patent production process. It was a new investment for BASF. Since the positive of Glufosinate market perception, The L-Glu tech will also drive the Liberty business development in the GMO programs. 

The market is very interesting. The winner always wins. When you launch a highly advanced product in the market, the customers will consider your company’s other product can be higher quality than other producers with high value. So there could be a brand new future for BASF’s L-Glufosinate combined with BASF's global market penetration of pipeline. 

Besides such two players, China also has other manufacturers which have ongoing production or have the plan to establish new capacities. 

Since the environment protection, Yi Sheng is facing the audit with low operation rate. Huifeng just launched a new 5,000 Mt Glufosinate capacity. Since ADAMA acquired Huifeng, so their capacity could be mainly for ADAMA. Huifeng could release the Glufosinate product in May coming from their “brand new“ 5000 Mt capacity. Currently, YongNong’s situation is not that stable. It might be because they are adjusting their process and invests in the new facilities.

The new competition is arising since the new investment on the new capacity of Glufosinate in China. Luba is aiming to have 5000Mt L-Glufosinate. Changqing and Binnong also want to get involved in Glufosinate supply. It seems that the leading Chinese agrochemical companies have positive philosophy to invest in the non-selective Hebrides. Like we mentioned at the beginning, they may prepare for the future demand of Glufosinate when multinational companies incubate the market. The Glufosinate supply market is turning around from blue ocean to red ocean.

Glufosinate, such non-selective herbicide price is still in a high position which is the key obstacle for global farmers to use it. As a main weed resistant controller, Glufosinate might have high growth when China manufacturers can decrease the production cost for the market competition. The L-Glufosinate will be critical for new entrance to build their branding globally.