Government's pesticide procurement gets hot in 2012

Publish time: 12th December, 2012      Source: CCM
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  Recently, government pesticide procurement has become a hot topic on many agricultural conferences. It is estimated that the procurement value has reached USD321.2 million (RMB2.00billion) in the application of wheat, rice, vegetable, tobacco, cotton and other crops. It has also become a good marketing method for dominant pesticide producers, according to CCM’s December issue of Insecticides China News.


  Lin Yanru, a researcher from Shandong Plant Protection Station, revealed that government procurement is the general development trend of China's agriculture industry. The coverage of government procurement ranges from rice, wheat, cotton and some other cash crops to vegetable and fruits, and its total investment is likely to be raised year by year. 


  Since 2011, government pesticide procurement has been in full swing. "Its coverage area and crop range have been gradually expanded. In 2001, Chinese government began to procure pesticides—the Ministry of Finance allocated about USD16.06 million (RMB100 million) every year for purchasing pesticides to control rice plant hoppers, rice stem borer, wheat rust, locusts and other pests and diseases", said researcher Lin Yanru.


  According to Li Yanru, in recent three years, the investment for government pesticide procurement has quickly increased. Many provinces growing wheat, rice have spent over USD16.06 million (RMB100 million) on pesticide procurement since 2009. Among them Hebei Province is the most prominent one which invested USD32.12 million (RMB200 million) every year during 2009-2011. Another big rice-growing province—Jiangxi also invested over USD16.06 million (RMB100 million) every year during 2010-2011.


  In 2012, the investment for government pesticide procurement has reached a new peak. According to the Ministry of Agriculture of China (MOA), the investment merely on wheat has reached about USD253.2 million (RMB1.6 billion) which has been allocated to 11 winter wheat-planting provinces and areas with a total planting area of 21.33 million ha. for the control and prevention of pests and diseases.     


  Generally speaking, government procurement has the following advantages:

  Firstly, pesticides with low toxicity, high effectiveness and environmental friendliness will be given prior consideration. Therefore, product mix will gradually become more reasonable.


  Secondly, large purchasing amount attracts many suppliers, and favourable procurement cost will adjust pesticide price and make it more reasonable.


  Thirdly, centralized bid improves the efficiency of marketing and creates mutual benefit for participants. 


  With Chinese government's increasing attention on government pesticide procurement, domestic pesticide enterprises start to realize the importance of anticipating in and obtaining bid invitations. Once winning the bid, pesticide enterprises can largely reduce costs and raise profits.


  Jiangsu Anpon Electrochemical Co., Ltd. (Jiangsu Anpon) is one of the bidding pesticide enterprise, and it has successfully bid in Hebei, Jiangxi, Shandong and Anhui in recent years. For example, in Oct. 2011, Jiangsu Anpon's pymetrozine (brand name: Feidian) successfully bid for the demonstration project of government procurement for high yield rice in Anhui Province. In June 2011, Hebei Province purchased a batch of pymetrozine formulations from Jiangsu Anpon to control wheat aphid; Jiangxi Province also purchased 300 tonnes of pymetrozine formulations from it to control rice plant hoppers in Sept. 2010. Another bid pesticide enterprise—Jiangsu Kwin Group Co., Ltd. also bid in Yunnan, Shandong, Henan and other provinces in recent years. 


  In fact, for the bid of government procurement, many pesticide enterprises still can't get involved in, even some large pesticide enterprises have the same situation. Manager Shenyangfeng from Shaanxi Sunger Road Bio-Science Co., Ltd. expressed that many enterprises had difficulties managing government procurement. Taking county-level procurement bid for example, the bid application letter usually needs to be sent from village government to country government and involves postage in every procedure. Only enterprises that have comprehensive social networks and bravery to compete for the price can act like a duck to water.


  The procedures of bid invitation are cumbersome and lots of pesticide enterprises lack the experiences of preparing for bid materials. Many pesticide enterprises had to give up the bid when they found that it was impossible to fetch the necessary materials in a short time as they treked a long way to other provinces for the bid invitation.


  In addition to the cumbersome procedures, high threshold set by the local governments was also a big obstacle to pesticide enterprises who want to obtain the bid invitation, especially those medium and small sized ones.


  Lastly, some overseas pesticide enterprises also see government procurement as a big opportunity and want to participate in. Though government favors domestic pesticides, it is believed that some foreign pesticide enterprises will benefit from government procurement thanks to excellent effect of imported pesticides and their increasing cooperation with the government. For example, spinetoram and spinosad from Dow AgroSciences have been selected in Jiangsu government procurement in 2012.


  Source: Insecticides China News 1212


  Main contents of Insecticides China News 1212:

  Domestic insecticide industry recovers but still faces challenges

  Yancheng Confident builds 2,000t/a bifenthrin intermediate production line

  Overall relocation of Jiangsu Kwin continues

  JPRI promotes fufenozide in China again

  Mesa Tech registers three insecticide technicals

  Guangxi: over 4,500 tonnes insecticides reduced by green control in 2001-2011

  Government's pesticide procurement gets hot in 2012

  Development of metaflumizone takes on well in China

  Development of outstanding acephate formulation is very urgent

  FNU develops helminthic agricultural film

  New technical registrations in Nov. 2012

  Sumitomo Chemical: the first formal registrant of clothianidin

  Monthly ex-factory prices of key raw materials in China, Dec. 2012

  Monthly ex-factory prices of main insecticides in China,  Dec. 2012

  Monthly Shanghai Port prices and FOB Shanghai price of main insecticides in China, Dec. 2012

  Average market price of main crops in China, 30 Nov., 2012


  Insecticides China News, a monthly publication issued by CCM on 10th of every month, provides the latest and influential analysis on insecticide industry for you, including company dynamics, supply and demand, price analysis, policy, raw material and intermediate.

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