Pesticide reduction and efficiency increase promote the proportion of biopesticide market increase year by year, and biopesticide substitution space is broad

At present, the proportion of biopesticides in the global pesticide market is relatively low, and in recent years, the number of products, the number of registrations and the use of them have shown an upward trend. Driven by the national pesticide reduction and efficiency policy, China's biopesticide market share is expected to further increase.

Definition of biopesticides

The development of green pesticides is an important strategy for the development of the pesticide industry, and the green development of pesticides is to support and guide pesticide enterprises to research and develop, produce low-toxicity, low-risk, environmentally friendly green pesticides. At present, the global research and development of pesticide products are developing in the direction of high activity, low risk and sustainable development. China's Ministry of Agriculture and Rural Affairs proposes to continue to promote pesticide reduction and efficiency, and vigorously support the registration and promotion of biopesticides, which provides a good opportunity and huge space for the development of biopesticides.

Pesticides can be divided into chemical pesticides and biological pesticides according to the source, the raw materials of chemical pesticides are inorganic and organic compounds, and the raw materials of biological pesticides are living organisms or their metabolites. Biopesticides are derived from nature, friendly and harmonious with nature, and have the advantages of green, efficient and environmental protection. The research and development, promotion and use of biopesticides are in line with the concept of agricultural green development, and are also the inevitable requirements of agricultural green development.

At present, there is no consensus on the definition of biopesticides in the world, and the category of early biopesticides only includes microbial pesticides. The definition of biopesticides by FAO includes biochemical pesticides and microbial pesticides. The U.S. Environmental Protection Agency defines biopesticides as including naturally occurring components of substances that antagonize microorganisms and control pests, as well as pesticide substances produced by genetically modified plants. The European Union defines biopesticides as pesticides based on microorganisms or natural products.

In 2017, the Ministry of Agriculture and Rural Affairs of China defined biochemical pesticides, microbial pesticides and plant source pesticides in addition to chemical pesticides. 

Biochemical pesticides should simultaneously meet the following two conditions: 

1) There is no direct toxicity to the control object, only regulating growth, interfering with mating or seduction and other special effects; 

2) Natural compounds, if synthetic, its structure should be the same as natural compounds.

The proportion of biological pesticides is relatively low, and the replacement space is broad

In the past 30 years, global biopesticide sales have grown rapidly, and the main market is currently in the Americas. 

According to Phillips McDougall and HIS Markit, global biopesticide sales have grown from $100 million in 1993 to $5 billion in 2020 and are expected to reach $8.8 billion in 2026. In 2020, the largest share of the global biopesticide market is in the Americas, accounting for about 44%, of which the United States accounts for the highest share, accounting for about 33% of the world, followed by Europe (20%), Asia (13%), Oceania (11%), Latin America (9%) and Africa (3%).

The number of biopesticides registered in China is less than 10% of the total number of pesticides registered, among which agricultural antibiotics are the main ones.

China is a large country in the production and use of pesticides, and hundreds of biological pesticides have been registered and produced. According to the statistics of "Overview and Prospect of biopesticides in China", as of July 1, 2021, the number of biopesticides registered in the pesticide identification Institute of the Ministry of Agriculture and Rural Affairs is about 4,700, accounting for about 10% of the total number of pesticide registrations, of which agricultural antibiotics account for the highest proportion, reaching about 6.136% of the total number of pesticide registrations. The other species were biochemical pesticides (1.194%), microbial pesticides (1.155%), plant pesticides (0.479%) and natural enemies (0.005%).

From the use point of view, in the registered biopesticides in China, plant growth regulators accounted for the highest proportion, the rest are insecticides, fungicides, health insecticides and herbicides, of which there is no biopesticides registration in herbicides.

The proportion of the use of biopesticides and the registered number is expected to continue to increase

Under the zero-growth action of pesticide use, China's biopesticides have increased year by year, and the sales profit margin of enterprises above the scale of biopesticide industry has generally shown an increasing trend. 

In 2015, the Ministry of Agriculture and Rural Affairs of China issued the "Action Plan for Zero Growth of pesticide Use by 2020". As of 2019, the amount of pesticide used in China was 1.3917 million tons, with a compound growth rate of -6.01% since 2015. At the same time, the structure of pesticide varieties was further optimized, and highly toxic pesticides were gradually phased out. The use of biopesticides increased rapidly, from 70,735.57 tons in 2015 to 83,476.94 tons in 2020, with a five-year compound growth rate of 3.37%.

In 2022, China's Ministry of Agriculture and Rural Affairs issued the "Action Plan for Chemical Pesticide Reduction by 2025", further pointing out that promoting pesticide reduction is an inevitable requirement for promoting high-quality agricultural development and accelerating the comprehensive green transformation of agriculture, and is also an important measure to ensure the quality and safety of agricultural products and strengthen the construction of ecological civilization.

According to the data of the National Bureau of Statistics, in recent years, the number of enterprises above designated size in China's biopesticide industry (annual output value of more than 20 million yuan) has remained at about 140. In 2017, China implemented the new "Regulations on Pesticide Management", the transformation of market supply and demand structure, the integration and optimization of industry resources, and the upgrading of environmental protection and safety supervision. China's biopesticide industry showed a downward trend in 2017-2018, gradually recovered in 2019, and maintained a fluctuating upward trend in recent years from the point of view of sales profit margin.

In recent years, China's biopesticide’s research and development efforts have increased, and the number of authorized patents has generally shown an upward trend and has reached a high level. Among the newly registered pesticide varieties, the proportion of biological pesticides has increased year by year. 

Before 2000, the number of authorized patents for biopesticides in China was small, no more than 5 per year, since 2000, the number of authorized patents increased rapidly, reaching a maximum of 454 in 2015, after 2015, the number of patents fell slightly but still maintained a relatively high level. The proportion of new pesticide varieties registered is also rapidly increasing, and in 2018, biopesticides accounted for only 37.5% of the newly registered pesticide varieties, and the proportion increased to 72.7% in 2021.

According to the data of Pesticide Information Network, from 2020 to December 10, 2021, the top five active ingredients of newly registered biochemical pesticides in China are 24-epibrassinolide, Gibberellic acid, Amino-oligosaccharins, Gibberellic A1+A7 and Benzylaminopurine. The number of registrations was 51, 39, 29, 25 and 20, which were mainly natural plant growth regulators. 

Bacillus subtilis was the main registered active ingredient in microbial pesticides, with 15 registered components, followed by Bacillus thuringiensis with 5 and Beauveria bassiana with 4. Among the new varieties of microbial pesticides registered, bacteria were the main ones.

The number of active ingredients registered in plant pesticides is more balanced, Matrine, Berberine, Azadirachtin and so on, in addition, Physcion, Pyrethrin, Rotenone, carvacrol also have a small number of registered. 

There was A large difference in the number of active ingredients registered in agricultural antibiotics, with the number of Avermectin registering as high as 76, accounting for an absolute dominant position, followed by the number of Kasugamycinremycin registering 38, while the number of other active ingredients Spinosad, Spinosad B, Ningnanmycin, Polyoxin and Validamycin A registering only single digits. Pesticides and fungicides are the main new varieties of agricultural antibiotics since 2020.

Focus on enterprises

1. Limin Shares 

Limin is one of the key pesticide production enterprises in China, with the largest yield of Mancozeb, Cymoxani, Fosetyl-aluminium, Pyrimethanil and Metham-sodium in China. The company is also one of the earliest domestic enterprises engaged in the industrial development of Avermectin, Emamectin Benzoate, Glufosinate ammonium, Diflubenzuron, Clothianidin, and its sales rank among the forefront in China and the world. The New River Company has the world's largest Chlorothalonil capacity. It has unique advantages in protective fungicides, biological pesticides and herbicides.

The company Veyong has Avermectins, Emamectin integrated industry chain, has obvious technological advantages in biological fermentation, its titer, product quality is significantly better than peers.

2, Qianjiang Biochemical 

The company is one of the few domestic enterprises that can simultaneously engage in the research and development, production and sales of plant growth regulators and their formulations, and have a complete plant growth regulator industry chain. 

The company's main products include plant growth regulators (Gibberellic), insecticides (Avermectin, Emamectin Benzoate), fungicides (Validamycin, Propiconazole, Azoxystrobin, Kresoxim-methyl), etc. Among them, plant growth regulators Gibberellic acid series products are mainly applied in rice planting and cash crops. The company's customers are mainly distributed in Jiangsu, Zhejiang, Shanghai, Anhui, Hunan, Jiangxi, Hubei and other major rice producing areas, and the cash crops are mainly in Guangdong, Guangxi, Fujian, Hainan, Yunnan, Gansu, Shandong, etc. At the same time, the company's products are also exported to overseas such as the United States, Britain, South America, India, Vietnam and the Middle East region.

The company takes Gibberellic products as the main line, and continuously expands the research, development and production of new efficient and environmentally friendly pesticide formulations in the current market demand as a supplement. The technical level and product quality of Gibberellic products have been in the forefront of the domestic product category, production volume and sales volume. As of December 31, 2022, the company has a total of more than 50 original drugs and new preparation products, and the promotion fields involve crop increase, shaping, disease and pest control and other fields.

The company has entered a new stage of transformation and development after the completion of major asset restructuring in 2022, and the new pattern of integrated development of the three main businesses of "ecological environmental protection + biological pesticides + water operation" has gradually become clear. The company achieved operating income of 2.009 billion yuan in 2022, a year-on-year decrease of 1.09%;

NPS

NPS is a national high-tech enterprise and industry leader engaged in the production and marketing of environmentally friendly green pesticide formulations and plant nutrition and other agricultural inputs, and engaged in the operation of modern fresh consumer goods with characteristics. It has long rooted in rural areas, focusing on agriculture and serving farmers. Through nearly 30 years of deep cultivation in China's rural market, we have carried out fruitful exploration and practice in agricultural services, specialty crops planting and modern specialty fresh consumption fields, and built a unique core competitiveness.

The company achieved operating income of 4.27 billion yuan in 2022, down 1.77% year-on-year. In the first three quarters of 2023, the company achieved total operating income of 3.059 billion yuan, an increase of 24.95%, mainly due to the decline in the price of pesticide in 2023, and the decrease in the operating income of the company's pesticide formulation business caused by dealers' destocking. Since the second half of 2023, pesticide channel inventory has been further reduced, and the industry prosperity is expected to improve and drive the company's performance to rebound.