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Glyphosate prices rise, boosting industry leaders' performance
Since mid-to-late May, glyphosate, the world's most widely used herbicide, has seen a gradual price increase. Industry data shows that as of middle June, the market average price of 95% glyphosate technical powder has risen by 2.6% compared to early May.
Most of China's glyphosate products are exported, and the period from June to August marks the peak season for herbicide exports from China to South America. Looking ahead, with the increasing cultivation area of genetically modified crops and the gradual phasing out of other herbicides like paraquat, the market demand for glyphosate is expected to continue growing, which is likely to enhance the performance of industry leaders.
Why Are Glyphosate Prices Rising?
Glyphosate accounts for about 30% of the global herbicide market. Reviewing its price trend in recent years, glyphosate prices peaked at over 80,000 yuan per ton at the end of 2021, before gradually declining. Currently, glyphosate prices and profit margins are at historically low levels. On the demand side, downstream demand remains stable with active inquiries, and some leading companies have orders scheduled through July. As of June 5, domestic glyphosate inventory was approximately 51,200 tons, a year-on-year decrease of nearly 8%, indicating significant destocking.
On the supply side, global glyphosate technical capacity was about 1.183 million tons in 2024, with a high industry concentration. There are approximately 10 major producers globally, with Bayer's Monsanto an annual capacity of about 370,000 tons, and the remaining capacity mainly concentrated in China.
It is worth noting that recent reports suggest that Bayer is preparing a plan to address large-scale lawsuits related to its herbicides. If unsuccessful, Bayer may seek bankruptcy for Monsanto.
Will Glyphosate's Market Outlook Improve This Year?
Industry insiders generally agree that the recent price increase is mainly due to increased downstream demand and market expectations of future supply changes. Experts believe that the recent price rise is partly due to long-term low prices, which makes the current increase reasonable. Additionally, the release of previous orders to meet South American shipping schedules has led to busy production schedules. In the long term, the potential bankruptcy of Monsanto could reshape the industry landscape.
Many industry experts indicate that as the overseas pesticide destocking cycle nears its end and procurement patterns normalize, glyphosate demand has been steadily recovering. In the long run, with the expansion of genetically modified crop cultivation and the phasing out of other herbicides like paraquat, the market demand for glyphosate is expected to grow further.