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The Export of Chinese Abamectin API is in Good Situation

Posted at April 3, 2014 | By : | Categories : Company News | Comments Off on The Export of Chinese Abamectin API is in Good Situation

Abamectin is a kind of 16-membered ring macrolide compound with insecticidal, carotidal, nematicidal activity produced by fermentation of streptomyces griseus in streptomycete. Some pundits predicted that the 21st century would be the century of biological pesticides. It is reported that the European bio-pesticides sales had increased from 100 million dollars in 1997 to 169 million dollars in 2004, from which the trend shows, abamectin biopesticides is the most popular and highly competitive new product among the current biological pesticide market. In China, the growth of abamectin application is relatively slow, but the market has begun to show signs of gradually growing.

Abamectin API

As a new antibiotic bio-pesticide with high selectivity and high security, more than a decade, with farmers’ understanding of the characteristics of avermectin and their pesticide derivatives varieties increasing and highly toxic pesticides gradually withdrawn from the market, the demand and sales of abamectin insecticide will gain continually growing market space. Coupled with earlier this year the country canceled the agricultural tax, making farmers’ purchasing power stronger than before, so it is envisaged a volume growth stage of avermectin demand.

From the global pesticide market, bio-pesticides sales and pesticide transgenic technology sales have accounted for 10% of global pesticide sales, but this figure is less than 5% in China, which also indicates avermectin has a good market expansion space in China. Domestic productivity and sales are growing and there are eight major producers of Chinese avermectin APIs, the production capacity of these enterprises ranging from a few tons to tens of tons.

A few years ago, avermectin APIs market competition was so stiff that prices dipped rapidly from tens of thousands of yuan per kilogram to 3,000 yuan, actually fell to 1,000 yuan per kilogram in 2003 at the lowest point, so in 2004 many companies reduced the production. Thus, in early March 2004, the supply fell short of demand and prices rebounded sharply that the average price rose to 1730 yuan/kg, even the price was not available; therefore, many profit-driven companies began the urgent mass production of avermectin which led to a rapid production increase. Experienced a disorderly competition price war, avermectin prices fell again in 2005 when the Chinese avermectin production capacity was over 800 tons and 400 companies involving avermectin production registered a total of 1,300 products, including 14 registered raw material drug companies, two formally registered companies, with more than one billion yuan sales (including exports).

Exports can better attract investment. Since 1995, 30%~40% of the Chinese avermectin production is for export. Present, the export volume gradually increases as well as the price; export areas are mainly concentrated in Brazil and Spain. In the first three quarters of 2004, export of avermectin was thriving, then it began to decline in the fourth quarter, but the export prices were still high. After 2005, the price of avermectin began to fall and the profit enterprises gained was lower and lower, so many abamectin suppliers shut down or converted to other more profitable products. But as dealers are reluctant to sell it even if the market is in supply shortage, the prices won’t rise for this reason. Nevertheless, the export situation still attracts a good number of businesses to invest in this area.

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