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光大证券:除草剂草甘膦高景气延续 供需紧平衡利好行业龙头

Everbright Securities: The high boom in the herbicide glyphosate continues and the tight balance between supply and demand favors industry leaders

Zhitong Finance ·  Jan 12, 2023 16:22

Everbright Securities released a research report saying that herbicides have the largest market share among pesticides in the world, while glyphosate is the largest single product of herbicides, Zhitong Financial APP learned. In terms of the breakdown of herbicides, global sales of glyphosate reached $5.251 billion in 2019, accounting for 18.1 per cent of global herbicide sales. At the same time, the crop planting market in China is broad, but the penetration rate of GM crops is still low. The continuous promotion of GM crops in the future will bring an increase in demand for glyphosate in China. Glyphosate is expected to maintain a tight supply and demand pattern in the medium to long term, and industry-leading enterprises will fully benefit by virtue of their advantages such as cost, scale and environmental protection.

Recommended:Domestic glyphosate industry leading companies Yang Nong Chemical (600486.SH), Xin'an shares (600596.SH) and Jiangshan shares (600389.SH).

The main points of Everbright Securities are as follows:

Herbicides have the largest market share in the world, and glyphosate is the largest single herbicide:

Herbicide is the core means of weed control all over the world, and it is one of the most important varieties of pesticides in the world. According to PhillipsMcDougall data, global sales of crop herbicides were about US $27.407 billion in 2020, accounting for 44.2% of the crop pesticide market. According to the prospectus of Xianda shares, in recent years, the application area of herbicides in China has increased at the rate of 30 million mu per year, and at present it has reached 60 million hectares, and the effective components of herbicides have reached more than 80, 000 tons per year, and in the next 10 years, the application area of herbicides in China is expected to increase by 31 million hectares, which has great market potential and development space. Glyphosate is the highest proportion of herbicides and the largest single product of pesticides at present. In terms of the breakdown of herbicides, global sales of glyphosate reached $5.251 billion in 2019, accounting for 18.1 per cent of global herbicide sales.

The continuous promotion of GM crops and the withdrawal of paraquat open the space for glyphosate demand.

The global GM crop industry is expanding and the market space is vast. According to ISAAA data, the global planting area of GM crops has increased from 1.7 million hectares in 1996 to 190.4 million hectares in 2019, with a CAGR of about 22.8 percent. Affected by the persistent global food shortage, the development of genetically modified crops with improved traits will become a general trend. China has issued relevant policies to accelerate the process of GM commercialization. At the same time, the crop planting market in China is broad, but the penetration rate of GM crops is still low. The continuous promotion of GM crops in the future will bring an increase in demand for glyphosate in China. In addition, paraquat has the second highest incidence of poisoning after organophosphorus pesticides, and its use has been banned or strictly restricted in more than 20 countries. The restricted use of paraquat provides a large incremental space for glyphosate. At present, the global paraquat production capacity is mainly concentrated in China. As of July 2022, China still has 135000 tons of paraquat production capacity, which is expected to continue to withdraw from the market in the future, which will lead to an increase in demand for glyphosate-based herbicides.

The pesticide industry is booming, and glyphosate maintains a tight balance between supply and demand in the medium and long term.

Since 2020, the COVID-19 epidemic and the comprehensive escalation of the geopolitical conflict between Russia and Ukraine have once again aggravated the instability of the global food supply system, pushed up the importance of "food security", and the rise in global commodity prices has supported the prices of pesticide products. The pesticide industry is in a business cycle. At the same time, global glyphosate production capacity is concentrated in the United States and China. The world has a total production capacity of 1.122 million tons of glyphosate in 2021, with the exception of Bayer (Monsanto)'s 370000 tons / year IDA glyphosate production capacity, all concentrated in China. In the future, there will be no new production capacity except 50, 000 tons / year glyphosate of Xingfa Group. At a time when the prosperity of the pesticide industry is rising and the supply and demand pattern of glyphosate has improved, glyphosate is expected to maintain a tight supply and demand pattern in the short term. In recent years, the operating rate and output of glyphosate in China have increased steadily, and the price is in the upward cycle at present. The flood in Leshan, Sichuan Province in 2020 led to the suspension of production of some glyphosate enterprises, and the double control of energy consumption in the second half of 2021 led to a sharp rise in the prices of raw materials such as yellow phosphorus and glycine, which pushed up the price of glyphosate. But it's still at a historically high level.

Risk Tips:The fluctuation of crude oil price affects the profit risk of pesticide enterprises, and the decline of agricultural product price leads to the risk of pesticide demand decline, environmental protection and production safety risk.

The translation is provided by third-party software.


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