Flooding in Yangtze River to cause severe economic damage in China 08-08-2020

According to China’s Ministry of Water Resources, due to the impact of the recent heavy rain in China, the reservoir inflow of The Yangtze River Three Gorges Reservoir reached 50,000m³/second at 2:00 p.m. on July 26. According to a report from July 27, the mainstream of the middle and lower reaches of the Yangtze River had gone beyond the warning water level for the past 20 days since July 7. The report also stated that the mainstream of the Huai River had also gone beyond the warning water lever for the past 10 days since July 17. As for Tai Lake, its water level had passed the warning water level for the past 29 days since June 28. Recently, the Chu River in Anhui province, Chang River in Jiangxi province and 104 other rivers in China have also passed their warning water levels.

On July 12, due to the severe situation of the continuous torrential rain in many places in China, the Office of State Flood Control and Drought Relief Headquarters increased the emergency response level from level III to level II. Officials advised that companies and enterprises located close to the riverside should be cautious and may stop operations and perform emergency evacuation when necessary.

As of July 12, the recent flooding has impacted 37.89 million people in 27 provinces including Jiangxi, Anhui, Hubei and Hunan and has caused 141 deaths.


Flood season of Yangtze River may influence pesticide suppliers

Due to the severe flooding in the Yangtze River, supply of many pesticide products in Jiangsu province and phosphate fertilizers in Hubei province has been temporarily restricted. 

The flood has severely devastated several pesticide producing provinces located in the middle and lower reaches of the Yangtze River such as Jiangsu, Hubei and six other provinces. According to annual statics, the provinces affected by the flood accounted for the following percentages of China’s annual chemical industry revenue in 2018:Jiangsu (14.4%), Zhejiang (9.1%), Hubei (3.6%), Anhui (2.9%), Hunan (2.6%), and Jiangxi (1.9%).  

Most chemical industries located beside the Yangtze River or within 3 km of the Yangtze river produce pesticides and phosphate fertilizers. In 2019, Jiangsu produced 740 thousand tons of technical grade pesticides, accounting for 33% of China’s 2019 production. Over 20% of the agrochemicals produced in Jiangsu are distributed within 3km of the Yangtze river, among which pesticides, herbicides, and germicides account for 47%, 39%, and 56% respectively of China’s production.

Most phosphorous chemical industries are distributed throughout the Hubei and Sichuan provinces. It is estimated that industries producing ammonium dihydrogen phosphate located within 1 km of the Yangtze river and between 1km to 3 km of the Yangtze river account for 16% and 7% of the total number of ammonium dihydrogen phosphate industries in China. Ammonium phosphate industries located within 1 km of the Yangtze river and between 1km to 3 km of the Yangtze river account for 11% and 4% of the total number of ammonium phosphate industries in China.


Yangtze River flooding may cause agrochemical shortages

Some analysts believe that the extreme weather will slow down the demand and supply of chemical products from the Yangtze river.  As most pesticide and phosphorous chemical industries lie on the Yangtze river, some chemical products may even experience shortages.  For example, the only producer of methyldiethoxyphosphine, an intermediate for production of glufosinate-ammonium, namely Honghu City Yitai Technology Co., Ltd. has suspended production due to the flood disaster, and the timeline for work resumption remains uncertain, which may affect the supply of glufosinate-ammonium.


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