Recently, after over a year of statistical analysis of data, China Crop Protection Industry Association (CCPIA) officially released the China Agrochemical Price Index (CAPI) of 2013 (see the following chart). The CAPI quantizes the changes in the pesticide industry, visually shows the industry development trend and can directly affect relevant fields' judgment on the industry development; through the analysis of the changes of the CAPI, one can treat the development of the pesticide industry more rationally, thus it can reduce blindness in investment and production expansion. The release of the CAPI is considered the first step to establish an early warning system for the economic development of the China pesticide industry.
From the CAPI changes, it can tell the micro-economic development situation of the industry:
I. The pesticide industry showed a wavy economic development in 2013
In 2013, the annual average CAPI achieved 104.87. It rose gradually from January to October and reached its highest 111.72 in October, an increase of nearly 12% over that in February; however, after November, affected by the reduction in sales caused by the production suspension for maintenance by most pesticide enterprises or the reduction in operating rate, the unclear pre-judgment on the price change of staple pesticide products, the unclear environmental protection scrutiny effect of glyphosate and the increased production capacity of some enterprises, the CAPI decreased by 5.32% in December compared to that in last December, a decrease of nearly 11% compared to that in October 2013.
In 2013, the CAPI change of herbicides was consistent with that of the overall CAPI. The annual average CAPI of herbicides was 107.65 and reached its highest 118.97 in October, an increase of 19% over that in February. The CAPI change of herbicides directly affects overall CAPI change.
In 2013, the CAPI of insecticides fluctuated slightly, with an annual average of 98.50. The overall price level of the year was lower than that at the beginning of the year. The year-on-year fluctuation ratio during the normal production seasons from March to October was less than 3%; November was a slack season for insecticide production and use, and the CAPI decreased to 94.68 accordingly. However, affected by the current warm winter, 2014 may be a year of peak insecticide usage, and enterprise may stock up. Therefore, the CAPI of insecticides increased significantly by 5.83% in December compared to that in last December, and achieved 100.20 for the first time of the year. It also surpassed the CAPI in February, reversing the overall declining trend of the whole month.
In 2013, the CAPI of fungicides was basically stable, with an annual average of 102.72, slightly higher than that at the beginning of the year. From February to December 2013, the CAPI fluctuated between 100 and 105, showing slight changes throughout the year.
III. Prediction on the CAPI of 2014
With the greater efforts on the supervision to the pesticide industry, especially stricter requirements on environmental protection, the CAPI will be further affected; the CAPI is also affected by the supply of upstream raw materials and the downstream demand. Considering comprehensively the factors, the CAPI will probably continue to show a wavy development trend in 2014.
The price change of herbicides is expected to continue to affect the change of the CAPI of the whole pesticide industry, and glyphosate, paraquat, atrazine and acetochlor will still be the major products affecting the price index of herbicides. In particular, as the results of environmental protection scrutiny of glyphosate are becoming clearer, it will directly affect the price index of herbicides.
In 2014, the number of manufacturers of generic insecticides and fungicides will increase, and their scales will be expanded. Considering that many factors such as the changeable global climate will directly affect the price indexes of insecticides and fungicides of the new year, it makes the CAPI change rule difficult to predict.