After Glyphosate， dicamba may represent the market myth again

Thanks to cultivation of glyphosate-resistant GM crops in large scale, glyphosate become the world's number one selling herbicide. But with increasing serious problems of glyphosate-resistant weeds, and continued development of dicamba-resistant GM crop varieties, popularization of dicamba GM crops in a large area just around the corner, dicamba may represent the market myth like the previous skyrocketing glyphosate.

With growing problems of glyphosate resistance, Dicamba seems more promising

In recent years, glyphosate resistance problems intensified on a global scale, and became a focus of attention in crop protection field. Such as terrible problem of Canada weeds in soybean field of southern Ontario, especially the Canadian Erigeron is seriously affecting the crop yields.

Since glyphosate resistance becomes more and more serious, Dicamba seems promising, the market supply and demand is relatively balanced. It is understood that transgenic dicamba-resistant crop varieties like soybean and cotton from Monsanto, have been approved by the US Department of Agriculture. In this year there will be a large-scale commercial deployment which will significantly push up the demand for dicamba. The potential market scale is expected to reach ten billion yuan.

It is predicted that in 2017 the dicamba-resistant GM soybean total cultivation area is about 50 million hectares, the future market demand may increase from 15,000 tons to 50,000 tons or more, showing rapid growth. It expects that in 2017 the industry total production capacity is only 30,000 tons and the market supply situation can not fundamentally changed in a short term. Driven by rapid growth of demand, the industry boom continues to improve and prices are expected to continue to rise.

Increasing the export tax rebate makes the situation more acute

Not long ago, the Ministry of Finance adjusted export tax rebate rate of some products. The export tex rebate rate of dicamba increased, rising from the previous 9% to 13%, basically full rebate. It will help enhance the industry margins and export demand, which can make the situation of dicamba more acute.

China is a major producer of dicamba, and industry total capacity is about 10,000 tons, mainly for export. The Ministry of Finance raised export tax rebate rate, which will help domestic companies to seize global market share, and bring new development opportunities to the industry.

Dicamba registration is speeded up as an investment hot spot

Currently global dicamba capacity is only 1.8 million tons, accounting for about 60% of our country. Since dicamba market is good, also of future demand, many companies have started their plan. The first: speed up dicamba product registration; the second: build up new factory and improve producing yields to enhance the market share.

According to the Ministry of Agriculture registration information, as of January 9th 2015, pesticide registrations of dicamba products totaled 50, including 21 original drug registrations, and 29 single preparation, Mixture registrations. Only in 2014 as many as 14 products got registered, accounting for up to 28%.

The enterprises of larger production capacity of original Dicamba in China are Jiangsu Changqing Agrochemical Co., Ltd. (2000 tons / year), Zhejiang Shenghua Beik Bio Co., Ltd. (2000 tons / year), Jiangsu Yangnong Chemical Group Co., Ltd. (1500 tons / year). Total capacity of these three companies is more than half of the amount of the total capacity in China.

Jiangsu Yangnong Chemical Group Co., Ltd efforts to build domestic dicamba leading enterprises.

 New capacity project of Nantong Base 5000 tons / year is expected to officially put into operation in the first quarter of this year, and the total capacity will be rised to 6,500 tons, accounting for over 30% of global market share. According to agency estimates, after the whole production, the income will be increased by more than 800 million yuan in revenue, and  net profit is about 150 million yuan. Profit increased nearly 40% compared with which in 2013. Changqing Agrochemical Co., Ltd has production capacity of Dicamba of about 2,000 tons. The company is considering about expansion of producing, and a new capacity target of 2,000 tons / year. With the long-term partnerships with international customers, company plans to expand market share.

Furthermore, Hunan Bide Biochemical Technology Co., Ltd said a new production line of producing dicamba original drug is on their plan, and they had made dicamba original drug registration; Shandong Rainbow Chemical Co., Ltd. said that they do not exclude starting new production lines for Dicamba.