CCM: Low crude oil price has little effect on China’s pesticide market 08-29-2016

Since mid-2014, the international price of crude oil witnessed sharp falls, from over USD100/bbl in June to below USD50/bbl currently, a drop of 50%. However, the falling price of crude oil has little effect on the price of China’s pesticide recently.

 

Wang Jianwo, secretary-general of the Crop Protection Industry Association of Hunan Province.

 

Since June 2014, the international price of crude oil began to fall, decreasing from over USD100/bbl in June to less than USD50/bbl currently, a drop of 50%. At present, the international crude oil price is hovering between USD45/bbl and USD55/bbl. Nevertheless, the price up and down of crude oil makes no difference to the pesticide price since crude oil price is not the core factors influencing the pesticide market.

 

According to the previous data, the high crude oil price brought little impact to pesticide and its intermediate industries. The impacts only take effect when the crude oil price begins to rise, since the price fluctuation of downstream fine chemicals always lags behind that of the crude oil price. Therefore, the price fluctuation of crude oil has a negligible effect on the market price of pesticide.

 

Firstly, pesticide as the end product in petrochemical deep-processing industry, its price is positively correlated to the crude oil price. But since the pesticide and its intermediate industries consume less crude oil in production, the falling price of crude oil may not good for the pesticide industry.

 

Secondly, thanks to the strengthening market demand and price rises in downstream market, the price growth rates of pesticides especially some basic pesticide intermediates can offset the falling crude oil price. That is to say, the fall in crude oil price can be ignored compared to the rising price of pesticide intermediates.

 

As a whole, the core factors influencing pesticide price and enterprises profits include market demand, pesticide performances and technology level of equipment, not only the price of raw material.


About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.

Subscribe to our Newsletter

 


Next Press