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Crop Protection China News

Vol.3 Issue 18. 2009 30 Sep. 2009

II

Vol.3 Issue 18Crop Protection China News

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China Crop Protection Summit 2010- will be launched in Shanghai China during 18th March to 19th March, 2010.

Ready Market Reports:- Outlook for China Glyphosate Industry 2009-2014- The Survey of Fipronil in China- Production and Market of Malathion in China - Methidathion Production & Market in China

Ready Trade Reports:- Imidacloprid Production and Export in China Jan.2008 -Jul.2009- Bifenthrin Production and Export in China Q1 2009- Methomyl Production and Export in China 2008-Jun. 2009- Abamectine Production and Export in China 2008-Jun. 2009

Coming Reports:- Production and Market of

Paraquat in China (2nd edition): 18th Sep 2009.- Crop Protection China Report (update, 2nd edition): Oct 2009- Future of Green Biotechnology

in China: Oct 2009

CCM newsletters related to Insecticides:- Crop Protection China News- Herbicides China News- Fungicides China News- Glyphosate China Monthly Report

Content

■ Overview ............................................................................................................ 01Performance of key pesticide companies in H1 2009 (II) .................................................................................. 01China optimizing pesticide registration structure ..............................................................................................03

■ Areas & Dynamics .............................................................................................. 04China to promote insect sex attractant ..............................................................................................................04

■ Company ............................................................................................................ 05Origin GM corn may get approval by 2011 .........................................................................................................05Dunhuang Seed to raise USD73.21mn for expansion .........................................................................................05

■ Crops ................................................................................................................. 07Gansu endeavors to boost potato industry ......................................................................................................... 07Heilongjiang promotes cold-tolerant wheat variety ...........................................................................................08Cotton yield expected to decline .........................................................................................................................09

■ Pests & Diseases ................................................................................................. 10Jiangsu severely hit by cotton verticillium wilt ................................................................................................. 10Pest and disease situation and forecast in Guangxi ............................................................................................. 11Average market price of main crops in China (15 Sep. 2009) ............................................................................. 11

■ News in Brief ...................................................................................................... 11

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Welcome to Crop Protection China News 0918.

Chinese economy has continued uptrend in recent months, with its GDP growing more

than 7% in the first seven months of this year, a performance better than most of the other countries. The strong economic recovery will boost the domestic demand for agrochemicals, thus favourable for many pesticide companies to regain profit growth in the second half of this year after significant slowdown in the first half.

To cope with the gloomy market demand, most pesticide companies have adopted a series of measures like cost reduction, strategy adjustments like focusing more on domestic market and formulation business, launch of new production lines and capital-raising by issuing new shares and so on to curb the profit loss in H1 2009.

With enhance efforts on GM crops development, China is expected to make great breakthrough in commercialization of GM corn, as Beijing-based Origin, the county’s third-biggest seed producer, announced that it might gain governmental approval within two years to sell its glyphosate tolerant GM corn variety.

Besides, local provincial governments are now endeavoring to boost grain yield, such as Gansu’s strong support to potato industry and Heilongjiang’s promotion of new cold-tolerant wheat variety, etc. However, China’s cotton yield is to decrease this year, mainly due to shrinking planting area, unfavourable weather conditions as well as increasing disease occurrence.

Headlines of Crop Protection China News 0918

Some listed pesticide companies have adopted several countermeasures like domestic market

expansion and product structure adjustment to achieve net profit growth in H1 2009.

China’s pesticide registration structure has been greatly optimized thanks to the six registration

regulations issued in Dec. 2007.

China has held an international workshop on insect pheromone for monitoring and controlling

key agricultural insect pests to promote green crop protection.

Beijing-based Origin’s glyphosate tolerant corn may be approved by Chinese government by the

end of 2011.

Dunhuang Seed plans to issue new shares to raise USD73.2 million to finance the expansion of

four segments concerning seed and food processing.

Gansu Province is to hold a potato conference in Dingxi City during 26-27 Sep. 2009, aiming to

further boost local potato industry.

Heilongjiang is to witness great breakthrough in wheat output with the increasing promotion of

new cold-tolerant winter wheat variety.

China’s cotton output is expected to decline sharply this year due to the reduced planting

area and unfavourable weather in early September.

Jiangsu was severely hit by cotton verticillium wilt in Sep. 2009 with stricken area of 85,000 ha.

Location of key companies covered in this issue

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■ Overview

Performance of key pesticide companies in H1 2009 (II)- Methods to ride over the crisis

In last issue, CCM has monitored the performances of 14 key pesticides companies in H1 2009. In this issue, we will introduce some successful countermeasures adopted by several companies to ride over the gloomy market and financial crisis.

In H1 2009, among the 14 key listed pesticide companies, only 4

companies, namely Noposion, Lier Chemical, Yangnong Chemical and QJBIOC, achieved net profit growth, thanks to their effective cost control methods, timely strategy adjustment and launch of new production lines, etc. Though some other companies suffered net profit drop in the first half year, they have also adopted some successful measures to curb the profit loss.

Compared with those export-oriented companies, the domestic-focused pesticide companies generally faced less pressure in maintaining sales and profit margin in H1 2009 benefited from China’s stable and considerable demand of agrichemicals, hence many companies have enhanced domestic sales efforts to maintain profits. Besides, with relatively stable sales price, formulation production had more stable profit margin than that of technical, thus, increasing formulation output was also widely adopted as a countermeasure to curb the loss in overseas markets.

Domestic market expansion

Quite a few pesticide producers suffered sales downturn in H1 2009, with export shrinkage in oversea market, thus many of them have paid more attention to the domestic

TABLE 1: Noposion’s pesticide sales situation in H1 2009 (Unit: million USD)

Pesticide Sales incomeChanges %

( VS. H1 2008)

Insecticide 66.78 8.10

Fungicide 30.23 31.24

Herbicide 30.64 90.13

Others 2.84 1.88

Total 130.49 40.52

Source: Noposion’s semi-annual report of H1 2009

FIGURE 1: Sales income structure of Huaxing Chemical in 2008 and H1 2009,

million USD

Sales in 2008

Sales in H1 2009

Source: Huaxing Chemical’s semi-annual report of H1 2009

Export promotion

Lier Chemical, the leading Chinese manufacturer of chloropyridine herbicides, is one of the few companies that have achieved export sales growth amid global export downturn, with its total export value amounting to USD33.8 million in H1 2009, up 26.82% year on year, which is the key factor contributing to its net profit increase.

Unlike some export-oriented producers who switch their business emphasis to the domestic market, Lier Chemical still endeavors to expand its oversea market with steady

sales, leading to severer oversupply and intensified price wars in the first half of 2009.

Noposion, who only focuses on domestic market, marvelously raised its market share further and witnessed successive breakthroughs in sales income. In H1 2009, it achieved total sales of USD131.23 million and net profit of USD13.79 million, up 26.53% and 38.41% respectively.

Strengthening marketing capability, merging local producers and introducing new competitive products are the main reasons accounting for Noposion’s success (See details in Crop Protection China News 0913, P1).

demand from several MNCs. Moreover, fierce price wars further shrink profits in the domestic market, so the company decided to continue to focus on export.

Producing to order with steady quality, Lier Chemical has established stable business relationship with MNCs like Dow AgroScience, which have continually purchasing products like clopyralid technical for their own formulation production.

According to its semi-annual report, Lier Chemical successfully expanded its business scale with major clients in the first half of 2009. Its sales income from top 5 foreign clients recorded USD26.5 million in H1 2009, accounting for 74.08% of the total major income, compared with 57.31% in the same period a year ago.

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Product structure adjustment

Facing obvious income reduction from key products, some companies have worked hard to enhance the production and promotion of the other pesticides.

QJBIOC, the major producer of gibberellic acid and Jinggangmycin in China, greatly endeavored to enhance the bio-insecticide of abamectin in H1 2009. As a result, abamectin made significant contribution to its net profit, while the two key products, namely

TABLE 2: QJBIOC’s pesticide business situation in H1 2009 (Unit: million USD)

Item Sales incomeSales changes % ( VS. H1 2008)

Operating cost changes % ( VS. H1 2008)

Profit rate changes % ( VS. H1 2008)

Insecticides 4.03 20.03 -25.72 16.2

Growth regulators 10.54 -1.03 -9.16 6.48

Fungicides 7.72 -21.46 0.44 5.06

Total sales 22.29 0.34 10.09 9.15

Source: QJBIOC’s semi-annual report of H1 2009

Cost control

Almost all the companies considered cost control as a key measure to cope with profit decline from price drop and market shrinkage. Some companies have successfully maintained stable profit growth with

In the next issue, CCM will predict the future performances of these pesticide producers in H2 2009, based on the market trends and their related marketing strategies on profit growth.

TABLE 3: Yangnong’s pesticide business situation in H1 2009 (Unit: million USD)

Major productsMajor

Income

Changes % ( VS. H1 2008)

Operating costs

Changes % ( VS. H1 2008)

Profit rate changes %

( VS. H1 2008)

Insecticide

Household & Sanitary pyrethroids

63.69 -3.80 48.87 -10.07 5.40

Agricultural pyrethroids 39.12 -23.21 31.97 -24.90 1.80

Others 1.52 -84.37 1.25 -85.31 5.30

Herbicide 56.32 -7.44 46.34 -7.97 0.48

Total 160.65 -14.41 128.41 -17.54 3.03

Source: Yangnong’s semi-annual report in H1 2009

gibberellic acid and Jinggangmycin, performed disappointingly due to market shrinkage, as shown in the following table. Thanks to the timely adjustment, it finally achieved remarkable net profit of USD2.69 million in H1 2009, up 186.69% year on year.

cost reduction.

Yangnong Chemical is a typical example of those who suffered major sales fall but witnessed net profit growth during H1 2009, mainly thanks to its cost cut in both production and management. Its sales cost, for instance, was USD1.32 million, down 5.4% year on year though it greatly extended the domestic sales scope. With large cost cut, its net profit witnessed a little rise to USD17.6 million, up 2.47% year on year, though the total sales declined to USD170.9 million, down 13.19 %.

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China optimizing pesticide registration structure

The implementation of the new pesticide registration rules since 2008 has facilitated China’s adjustment of pesticide registration structure, expresses Zhang Yanqiu, director of Institute for the Control of Agrochemicals Ministry of Agriculture (ICAMA), on the second ‘High-Level Forum on China Pesticide’ held in Suzhou City during 13~15 Sep. 2009. These regulations, aiming to shorten the effective period of temporary registrations, ban pesticide trade names, regulate formulation A.I. contents, heighten the entry threshold for pesticide production and standardize the label format, have promoted the following changes in the pesticide registration structure.

First, the number of temporary registration has significantly reduced and that of the formal registration has soared at the same time. Up to now, the number of formal registration

has accounted for 70% of the total, reaching around 19,000, far high than only 219 in 2005, merely 5.3% of the total in that year. Furthermore, the registration number of eco-friendly formulations also obviously rises, as applications for EW (emulsion, O/W), WDG (water dispersible granule), AS (aqueous solution) and CS (aqueous capsule suspension) formulations have all witnessed fast growth in recent two years.

During Jan. 2008~Aug. 2009, 325 EW, 340 WDG, 1,451 AS and 22 CS registrations had been approved, which outnumbered the sum of their registrations during 1982~2007.

With the deepening implementation of the above regulations, the proportion of temporary registration is forecasted to continue declining in the future, with the rising temporary registration cost under stricter environmental requirements and the shortened effective period. Total cost for temporary registration is to rise to around USD29,300 (RMB200,000) for a single formulation and USD58,600 (RMB400,000) for a mixed formulation.

Besides, the above regulations will standardize the formulation market by promoting appropriate label design and common names, as well as facilitate end users’ application. For instance, the labeled rate of safety interval of pesticides application has witnessed fast growth, reaching over 90% at present compared with merely 20% two years ago. Though some problems like use of pesticide trade names still exist (See Crop Protection China News 0913, P3), as China is in the transition period of common names replacing trade names, the pesticide formulation market will be more organized, thus favourable for industrial integration and relocation of resources.

TABLE 4: Main content of the six regulations released by Ministry of Agriculture in Dec. 2007

No. Main content

1 Stop pesticide trade name approval from 8 Jan. 2008. Require pesticide producers to adopt common names or abbreviations as pesticide names and clearly print them on

labels from 1 July 2008.

2 Shorten the effective period of pesticide temporary registration to three years from four years.

3 Supply supplementary test reports or comprehensive reports when submitting extended registration applications.

4 Heighten pesticide registration threshold via stricter requirement on temporary registration in terms of pesticide residue.

5 Standardize pesticide products’ label design and application specification.

6 Further standardize pesticide products’ A.I. content grads. For instance, the content grads of a single formulation product with the same A.I. and formulation type should be less than 5 grads.

Source: Ministry of AgricultureNote: No. 2-No. 6 have been implemented from 8 January 2008.

The six regulations refer to the 3 orders of Decision on Amending the Measures for Implementing the Pesticide Administration, Data Requirements for Pesticide Registration, Measures for the Administration of Pesticide Labels and Manuals, and 3 bulletins released on 8 December 2007, namely The Regulation on Pesticide Name Registration Approval, Standardization for Pesticide Naming and Pesticide Product’s Active Ingredient.

China’s pesticide registration structure has been greatly

optimized with higher proportion of formal registrations and increasing number of eco-friendly formulations, thanks to the six pesticide registration regulations carried out since Jan. 2008.

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China to promote insect sex attractant

PICTURE 1: Experts observing the effect of insect sex attractant

PICTURE 2: Orange tree applying insect sex attractant

China held the ‘International workshop on insect pheromone for monitoring and controlling key Agricultural insect pests’ during 9-11 Sep. 2009 in Guilin City, aiming to promote eco-friendly crop protection.

Experts from National Agro-technical Extension and Service Center (NATESC), Ministry of Agriculture of China, International Rice Research Institute and Department of Agriculture of Guangxi attended the workshop.

The attendees also visited two demonstration bases in Guilin on 10th Sep. In a vegetable demonstration base, insect sex attractant was used to trap spodoptera litura and diamond back moth over Chinese cabbage and broccoli. It was also applied in an orange demonstration base to trap bactrocera dorsalis (Hendel) and citrus leaf-miner.

Insect sex attractant provides a new method for pest control by disrupting the reproductive cycle of harmful insects and luring them into traps. Hence, it does not damage other animals or poses health risks to human beings as the conventional pesticides do.

Besides, it can reduce pesticide application times by 3 to 4 times a year and cut down pesticide dosage by 30% and application cost by USD65.9 per ha. Moreover, it will reduce pesticide residue, thus greatly increasing the crops’ marketability.

Attracted by the high efficiency and non-toxicity of insect sex attractant, China has been actively promoting this product nationwide. In 2007, China’s Vice Premier of State Council and Vice Minister of Ministry of Agriculture issued an important written comment, requiring agro-technical extension centers all over the country to actively promote application of this product.

According to statistics, insect sex attractant had been

used in 32 provinces by the end of 2008, with accumulative application area of over 800,000 ha. for pest control over rice, corn, cotton, fruit tree, vegetables, etc. ‘Guangxi first applied insect sex attractant to control pests in 2004 and widely promoted it in 2007. So far, 1.5 million insect pheromone traps have been applied in 71,200 ha. areas of fruit trees and vegetables. Reduction of pesticide use is estimated to be about 394 tonnes,’ says Zhang Mingpei, Head of Department of Agriculture of Guangxi.

‘Crop area suitable for applying insect sex attractant is estimated to exceed 3.3 million ha. in China. Therefore, this technology has bright market prospect,’ says Mr. Xia, director of the NATESC.

To speed up the promotion of insect sex attractant, experts suggested the following measures. On the one hand, the government can establish special funds and issue subsidies to promote the new product. On the other hand, agro-technical extension departments can enhance the promotion through guidance and training for end users.

■ Areas & Dynamics

Source: Ministry of Agriculture

Source: Ministry of Agriculture

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Origin GM corn may get approval by 2011

Origin Agritech Ltd. (Origin), the third biggest seed company in China, announced on 17th September that its glyphosate tolerant corn variety might be approved by Chinese government no later than 2011.

The company is going through the third phase of the five-step approval procedures for promoting its new modified glyphosate tolerant corn variety, and will send the sample crops to Chinese Ministry of Agriculture in the fourth stage in the near future.

Origin predicts that its glyphosate tolerant GM corn may be approved at the end of 2010 or in 2011, after which this variety will be commercialized in small area first. The company plans to commercialize it in 205,000 ha. areas at first and then expand to 1.2 ~2.2 million ha. the next year. Besides, it is expected to compete with Roundup Ready from Monsanto in the global seed market.

Origin Biotechnology, a wholly-owned subsidiary of Origin, has reached a mutual agreement with the Institute of Microbiology of the Chinese Academy of Sciences (CAS) and Sichuan Biotech Engineering Limited, which entitles it to utilize a licensed gene with high glyphosate tolerance.

This glyphosate tolerant gene, which is highly effective in both laboratory and field tests, can cut down weed control cost and can be applied to various plants like corn, soybean, rice, cotton and rapeseed, etc. It has been patented in both China and US, with respective patent life of 8.5 years and 7 years in the two countries.

During the patent life, Origin enjoys the exclusive rights to sell and develop the modified corn, soybean, rice, cotton

and rapeseed varieties based on this glyphosate tolerant gene in China and other countries, according to the company. ‘Corn is expected to be the first commercialized GM crop in China with relatively mature technology. Experts have finished the assessment of GM corn, and now it is up to the government,’ says Mr. Lin Ming, head of Institute of Microbiology of the CAS. China’s corn planting area is estimated to be 30.3 million ha. this year, up 1.8% over last year, driven by the government’s subsidy policy and high price of corn, reaching USD269/t on 29 Aug. 2009, up 23.2% year on year. Origin Agritech Limited, a leading agricultural biotechnology company and a competitive crop seed producer in China, specializes in research and development, production, sale and distribution of crop seeds such as corn, rice, cotton and canola.

Origin’s revenues for the year ended 30 September, 2008 were USD75.63 million (RMB513.49 million), an increase of 4.93% from USD65.31 million (RMB489.38 million) in the fiscal year ended September 30, 2007.

Dunhuang Seed to raise USD73.21mn for expansion

Dunhuang Seed Company (Dunhuang Seed, 600354), the biggest seed company in Northwest China, announced to raise USD73.21 million through issuing new shares for new assets purchase and expansion of four segments concerning seed processing and vegetable processing on 15 September 2009.

Dunhuang Seed will issue around 50 million shares at price of at least USD1.60/share (RMB10.95) to no more than ten specific investors. Among the potential investors, Jinta Supply and Marketing Cooperative, the fourth largest shareholder of Dunhuang Seed, has subscribed 5 million shares up to 15th September.

In the next three years, the raised fund will be mainly invested in purchasing assets of Xinjiang Manas Oil & Fat Company and expanding capacity of four business segments, including processing of corn seed, cottonseed oil, dehydrated vegetable and tomato paste.

In H1 2009, the revenue of Dunhuang Seed hit USD93.6 million, up 35.3% year on year, thanks to continuously increasing sales of processed seed and vegetable products,

but its net profit dropped to minus USD4.4 million due to sluggish cotton business caused by gloomy downstream industries like textile industry.

Despite the current difficulties, Dunhuang Seed believes that it’s a good chance to carry out production capacity expansion and increase market shares, based on current performance and bright market prospect of its major businesses.

With the raised capital of USD73.21 million, both of Dunhuang Seed’s total assets and net assets are to be significantly expanded. Furthermore, upon completion of construction, the company’s leading position in seed production and vegetable processing will be further improved in the near future.

‘The four new seed drying processing production lines will accurately keep corn seeds’ water content to below 13%, which will further raise the seeds’ livability and maintain their good quality under cold temperature in northern regions, reveals a director of Dunhuang Seeds. Therefore, after these production lines are completed, both of the

■ Company

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TABLE 5: Details of Dunhuang Seed’s future projects, million USD

Project nameTotal

Investment

Targeted raised money

Project Construction period (year)

1Corn seed drying production line

10.16 5.86 Expand processing capacity to 25,000t/a 2

2Purchase of Xinjiang Manas Oil & Fat Company’s assets

7.47 7.47 N/A N/A

3Technology upgrade for 1,000t/a cottonseed processing lines

7.32 7.32Expand processing capacity to 250,000t/a; cotton oil capacity to 40,000t/a and cotton meal to 110,000t/a.

1

4 Tomato deep processing 19.55 19.03Expand tomato processing capacity to 3,500 tonnes per day and tomato paste output to 20,000t/a

2

5Dehydrated vegetable deep processing

28.96 19.03Achieve dehydrated onion powder capacity of 6,800t/a; Dehydrated onion granule capacity of 6,800t/a.

3

6 Circulation capital 13.18 14.49 N/A N/A

Total 86.64 73.21

Source: Dunhuang Seed

TABLE 6: Dunhuang Seed’s business situation in H1 2009, million USD

BusinessMajor

income

Changes %

VS 2008

Operating costs

Changes %

VS 2008

Changes of operating profit rate % VS 2008

Seed 37.15 24.30 19.09 9.18 7.12

Cotton seed processing

37.19 53.49 37.91 65.83 -7.59

Vegetable processing 18.74 44.91 15.60 36.44 5.17

Others 0.15 -44.15 0.16 -42.22 -3.57

Total 93.23 35.28 72.76 36.10 -0.47

Source: Dunhuang Seed’s semi-annual report of H1 2009

company’s seed processing capacity and quality will be significantly improved.

However, the company will delay the investment in cotton seed processing project, due to the current gloomy cotton market and unfavorable related policies.

‘Current policies are more favourable to cotton growers as well as downstream processing companies, thus the profit margin for seed cotton processing has decreased over last year’, according to an insider.

In H1 2009, the company’s gains from seed business were largely offset by the loss from sluggish cotton business, as gross profit margin of cotton declined 5.7% to minus 1.9% due to the falling cotton price caused by insufficient demand.

Based on the forecast of gradually recovering cotton market, Dunhuang Seeds’ cotton business is predicted to resume growth in the second half year, which is to raise the company’s total net profit this year.

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Gansu endeavors to boost potato industry

Source: CCM International

Gansu Province is to boost local potato production and strengthen its competitiveness in potato processing industry through subsidies and supporting policies.

Gansu Province is to boost local potato production and strengthen its competitiveness in potato processing industry through subsidies and supporting policies. To promote the production and sales of local potato products, Gansu government is to hold a potato conference in Dingxi City during 26-27 Sep. 2009, which is the third time to hold such a conference in Dingxi.

Plenty of funds have been attracted in the previous two conferences for local potato industry development. In 2008 alone, the signed contract amount for 25 projects, including both domestic and overseas capital, reached USD199.1 million. Organizers are quite confident that more achievements will be made this time, expresses Shang Xunwu, vice director of Gansu Agriculture and Animal Husbandry Department.

Gansu has been endeavoring to further develop local potato industry by boosting output, raising product quality and developing deep processing industry, which are predicted to simulate market demand for potato seed and consumption of related pesticides.

In recent years, Gansu, the 5th largest

potato planting province in China, have regarded potato production as its main agriculture industry, especially after the release of ‘Regional distribution plan of superior agricultural products in China (2008-2015)’ on 3rd September, 2008, which planned to raise the whole country’s potato capacity and output to ensure food security (See Crop Protection China News 0819, P1).

Gansu is the only province that takes potato industry as a leading industry in China at present, reveals Mr. Shang, mainly attributed to resource shortage and favorable natural conditions in this province. Every year, Gansu government invests around USD12.4 million as special funds to support local potato industry, covering new variety breeding, virus free seedlings capacity expansion, matched facility construction and potato planting subsidies, etc.

Stimulated by the above measures, Gansu’s potato planting area has jumped to 65,300 ha. this year after successive growth in the past years. Based on current growth situation, the yield in 2009 is forecasted to reach around 11.5 million tonnes, with increase of 8,000 ha. year on year.

Besides, Gansu’s breeding capacity of virus free variety has reached 90 million plants per year, and capacity of breeder seed reaches 97.5 million per year. Its processing ability has also been significantly raised, reaching annual processing capacity of 2,000,000 tonnes fresh potato, 600,000 tonnes starch, 50,000 tonnes whole powder and 20,000 tonnes pure potato starch. Up to now, Gansu has developed three key potato planting regions to satisfy various demands like fresh food, food processing and deep processing, which account for around 70% of its total potato planting area, according to Han Linguang, vice director of Gansu Agriculture and Animal Husbandry Department.

To further develop local potato industry, Gansu aims to raise the capacity of the above three key potato superior regions in the near future. Therefore, Dingxi City, named as ‘Potato capital in China’, is drawing attention from both foreign and domestic investors at present.

‘With advantages in favourable climate and abundant rainfall during tuber growth period in July to September, as well as rich soil with large potassium content, Dingxi’s potato has high quality with large size, good taste, good storability and high starch, etc. Thus Dingxi has great potential to further develop the potato industry’, says Cheng Boheng, deputy mayor of Dingxi.

Dingxi aims to build the biggest breeder seed base in the future, with total virus free breeding capacity of 65 million plants per year (50.5 million at present), breeder seeds capacity of 100 million (81 million currently) and original potato breeding base area of 666 ha. (480 ha. at present). Besides, it plans to construct the biggest potato starch processing base in China, with annual output of over 150,000 tonnes (100,000 tonnes at present).

With Gansu’s increasingly close

FIGURE 2: Gansu’s potato planting area and yield in 2006-2009est

■ Crops

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TABLE 7: Recommended pesticides for key potato diseases/pests

Disease/ pest Recommended pesticide

Potato late blightAzoxystrobin, metalaxyl · mancozeb, fluopicolide · propamocarb hydrochloride

Virus diseaseTriaconeyl alcohol, moroxydine hydrochloride copper acetate

Potato early blightAzoxystrobin, cupric hydroxide, oxadixyl · mancozeb

Rhizoctoni solani Carbendazim, thiophanate-methyl, tolclofos-methyl

Potato ring rot Thiophanate methyl, fenaminosulf

AphidPirimicarb, matrine, imidacloprid, deltamethrin, acetamiprid

Ground pests (white grub, wire worm)

Phoxim, trichlorfon, deltamethrin, acephate

Source: Gansu Crop Protection Station.

Heilongjiang promotes cold-tolerant wheat variety

Heilongjiang Province is to witness great breakthrough in wheat output with the increasing promotion of ‘Dongnong Dongmai No.1’, the first local winter wheat variety with high cold tolerance.

On 14 Sep. 2009, the launching ceremony of winter wheat sowing in Heilongjiang was held in Bayan County, Harbin City, to promote planting of ‘Dongnong Dongmai No.1’ in the province this year.

Heilongjiang aims to expand planting area for this wheat variety to 400 ha. this autumn from 15 ha. in 2008, and increase the number of trial planting bases this year. If the new wheat variety achieves bumper harvest next year, Heilongjiang will further enlarge the planting area to 10,000 ha. in 2010 and 330,000 ha. later.

According to Tong Mingyao, professor of Northeast Agricultural University who developed ‘Dongnong Dongmai No.1’, this winter wheat variety, approved by related departments in 2006, is the only one able to resist extremely cold climate in Heilongjiang and safely go through the winter, with its highly improved cold tolerance’.

The promotion of this new wheat variety can largely increase Heilongjiang’s wheat output and boost soybean planting as well.

‘Expanding the planting area of improved winter wheat varieties could not only increase grain output and peasants’ income, but also possibly solve current problems of continuous cropping of soybean in Heilongjiang’, reveals Wang Xiaoyu, vice director of Heilongjiang Soybean Association.

Current yield of ‘Dongnong Dongmai No.1’ is around 5.12 tonnes per ha., 30% higher than that of the common spring wheat variety. As current planting area of spring wheat is around 330,000 ha. in Heilongjiang, its annual wheat yield is likely to increase 300,000 tonnes per year if all the spring wheat area were changed to grow this winter variety. Therefore, Heilongjiang’s wheat yield is to be greatly raised, thus accelerating its achievement of the grain output target of 50 million tonnes up to 2012.

Furthermore, large-scale promotion of winter wheat will raise land utilization rate and improve Heilongjiang’s soybean yield.

On the one hand, winter wheat is likely to raise local tillage utilization rate by 50% as it can be interplanted with soybean. After soybean is reaped in autumn, winter wheat continues to grow till its harvest in next July, after which succession crops can be planted in the same year, thus realizing three cropping in two years compared with current cropping way of only one harvest each year, explains Mr. Tong. On the other hand, interpolating of winter wheat and soybean can increase soybean yield. Previously, corn was the only crop suitable for rotation in soybean fields, which had partly restricted the yield growth of soybean as its yield

FIGURE 3: Geographic distribution of superior potato regions in Gansu

Source: CCM International

attention to local potato industry development, it is predicted that the related potato seed industry will see further advancement.

Furthermore, with the hike in potato planting area in Gansu, related severe diseases and pests will gradually pose threats to potato yield growth and quality improvement, which requires effective crop protection measures, especially adoption of chemical pesticides, reveals a director of Jiangsu Baoling Chemical Co., Ltd., a producer of metalaxyl · mancozeb for potato late blight control.

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Currently, soybean shares the largest planting area in Heilongjiang, with over 3.8 million ha. each year, accounting for more than 40% of the total, ranking the first in China. However, China’s soybean output is far from meeting the rising domestic demand from industries of edible oil, food and feed, etc.

Generally, continuous cropping will reduce the yield of soybean in the same field, due to restricting factors like accumulative soil-borne diseases, decreasing essential nutrition content in soil, weakening nitrogen fixation of root system, etc. Source: China’s Ministry of Agriculture

Notes: Soybean shares the largest proportion of beans.

Cotton yield expected to decline

China’s cotton output is expected to decline sharply this year due to the decrease in cotton planting area

and unfavourable weather in major cotton production provinces in early September.

Cotton output is estimated at about 6.4 million tonnes this year, down at least 10% over last year, according to surveys of relevant governmental agencies and research institutes. Insiders even predict the national output to drop by 15% to 20%.

Decreased cotton planting area is the main reason attributed to the decline in cotton output. According to the latest statistics, China’s cotton planting area this year

has decreased by about 13% compared with that of 2008, worse than the original estimate of about 10%.

Xinjiang, the largest cotton production region in China that accounts for about 29% of the total cotton area, witnessed a large decrease in cotton planting area, down 25% in northern Xinjiang and 10% in southern Xinjiang.

Other major cotton production regions also witnessed sharp decline in cotton area, such as Shandong (down 12.0%), Hebei (7%), Henan (12.0%) and Hubei (12.3%), etc.

Shrinking profit margin is the main reason causing the sharp fall of cotton planting area. Price of seed cotton has declined to about USD0.73/kg in recent several years, while cost of pesticides and fertilizers almost doubled.

‘Total input of growing cotton is about USD2,635/ha. currently, including USD219 for seeds, USD307 for fertilizer, USD373 for pesticides, USD878 for labor and USD878 for land rent. Given the cotton price of USD0.73/kg and unit seed cotton yield of about 3,600kg/ha., the output value of cotton planting will be about USD2,628/ha., even lower than the total cost. Thus growing cotton is not a good bargain,’ says Mr. Song Chunlian, deputy director of Huanghai Agriculture Research Institute.

Cotton output is also affected by the unfavourable weather in early September, with continuous rainfall in Shandong, Henan, Hebei and Jiangsu, and severe drought in Hubei Province, which has caused heavy loss in cotton output.

Dezhou City, the major cotton production region in Shandong Province, suffered continuous rainfall in early September, the most critical period for cotton production. Local unit yield of cotton is estimated to decline by 20% to 30%, and the maturity period is delayed to late September. Besides, output in Jizhou City (located in Hebei) and

FIGURE 4: Crop planting structure in Heilongjiang by area in 2007 (Unit: ‘000 ha.)

will reduce to certain extent after continuous cropping. ‘But this problem will be easily solved when winter wheat is promoted for rotation cropping with soybean’, says Xue Yingjie, vice director of Agricultural Development Office of Heilongjiang.

FIGURE 5: Main cotton production regions in China

Source: CCM International

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Jiangsu severely hit by cotton verticillium wilt

Jiangsu, the seventh biggest cotton planting province in China, has suffered severe attack from cotton verticillium wilt in Sep. 2009.

Since Sep. 2009, cotton verticillium wilt, also called as ‘cancer of cotton’, has been severely occurring in main cotton planting counties in Jiangsu, with total stricken area of 85,000 ha, accounting for over 70% of the province’s coastal area and 25% of its total cotton planting area.

Dafeng City, for instance, has witnessed 26,700 ha. stricken area this September, almost 73% of its total 36,700 ha. cotton area this year, including 2,000 ha. being totally destroyed. Besides, 90% of Rudong county’s cotton area has been infected with this disease, with stricken area of around 10,800 ha., which is predicted to reduce 40%-50% of this county’s cotton yield this year.

Favourable weather condition is the key reason for the severe disease outbreak. During late July to mid August, typhoon Morakot and freezing air brought by continuous rainfall were quite favourable to the disease occurrence and large-scale spread. Besides, the large amount of stagnant water in cotton fields also greatly affected cotton root growth, and directly weakened the plants’ disease resistance.

Moreover, the accumulative soil-borne diseases after continuous cropping also aggravated the disease severity this year. To raise unit cotton yield, Jiangsu has greatly promoted the high-yield varieties purchased from other provinces in recent years, however, it has caused the wide spread of cotton diseases with the transportation of infected seeds due to ineffective quarantine and lack of seed treatment. Up to now, there has been no area free of cotton verticillium wilt in Jiangsu’s cotton fields, some experts expressed.

Besides, the inefficient breeding for cotton verticillium wilt resistant variety and lack of crop rotation in Yangtze River regions are among the other factors leading to the severe occurrence this time in Jiangsu.

Based on current occurrence situation, Jiangsu’s total

stricken area is forecasted to reach 10,000 ha. this year, a 30% increase compared with that of the previous year, though the planting area has decreased 9% to 273,800 ha., according to Jiangsu Crop Protection Station.

The outbreak of verticillium wilt has drawn close attention from related departments. In fact, other regions in Yangtze River basin like Hubei and Anhui have also begun to see the same trouble for cotton production.

Corresponding measures to control the disease’s further extension are to be adopted more widely in the near future, including promotion of disease resistant crops, crop rotation, seed treatment, application of chemical pesticides, etc.

The demand for effective seed treatment pesticides like carbendazim is to increase in Yangtze River regions with about 3 million ha. cotton area currently, accounting for 50% of the China’s total.

■ Pests & Diseases

Nantong City (Jiangsu) is estimated to decline by 30% to 50% respectively.

Different from other cotton plating provinces, Hubei suffered heavy drought this month. ‘About 70% of the cotton plants drooped in the heat of the sun. It is estimated that cotton yield in Tianshui City (major cotton region in Hubei) will drop by 30% over last year,’ according to Bureau of Agriculture of Tianshui Municipality.

In contrast to the output decline, cotton demand is expected to increase this year, which is predicted to exceed 10 million tonnes in 2009/2010 with the rising operating rates of large and medium-sized textile enterprises. In

2008/2009, China’s cotton demand was less than 10 million tonnes due to sluggish overseas demand for textile products.

The gap between cotton output and demand might push up the domestic cotton price. Although the seed cotton quality was affected by continuous rainfall, its price in late September was between USD0.82/kg to USD0.88/kg, a little higher than that of last year. To stabilize cotton price, Chinese government may raise cotton import quotas this year to make up the supply gap.

FIGURE 6: Occurrence situation of cotton verticillium wilt in Jiangsu in Sep. 2009

Source: CCM International

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Average market price of main crops in China (15 Sep. 2009)

29-Sep 15-Sep Sep., 2008

USD/t RMB/t USD/t RMB/t USD/t RMB/t

Wheat 277 1,894 275 1,881 247 1,689

Corn 269 1,837 268 1,833 249 1,700

Soybean(oil) 528 3,608 536 3,663 656 4,483

Soybean(food) 820 5,600 820 5,600 800 5,467

Peanut 999 6,825 974 6,650 1,142 7,800

Indica rice 430 2,934 444 3,035 427 2,917

Japonica Rice 450 3,071 465 3,173 443 3,028

Rapeseed 540 3,685 543 3,710 581 3,967

Broomcorn 284 1,940 283 1,930 300 2,047

On 13th Sep. 2009, Dongying Dasheng Chemical Technology

Co., Ltd. launched a R&D center focusing on highly efficient pesticide intermediate to enhance its R&D capacity in this filed. The company’s 1,000t/a 4-methoxymethyl-2,3,5,6-tetrafluorobenzyl pyrethrin production line has succeed in small scale and pilot-scale production in the new R&D center, and is expected to generate annual pre-tax profit of USD11.71 million upon completion.

In Aug. 2009, China’s fertilizer price declined by 3.7% over the previous

month and 19.9% over last year, and pesticides prices maintained the same level as that of July and increased 0.1% year on year, according to the statistics released on 14th Sep. by People’s Bank of China.

Soybean output of Heilongjiang, the major soybean production base

in China, is expected to decline by about 3 million tonnes over last year, mainly attributed to the unfavourable weather conditions such as flood, drought and frost in several regions, and the decrease in soybean planting area which is estimated to decline by

about 10% year on year.

Phenazino-1-carboxylic acid, developed by Shanghai Jiao

Tong University in 2005 who acquired a patent in 2008, gained the approval of market entry from related experts in mid September. Mr. Shao Zhenrui from National Agro-tech Extension and Service Center suggested enhancing the industrial production of this new product as soon as possible. Shanghai Nongle Biological Product Co., Ltd., which cooperated with Shanghai Jiao Tong University on biological pesticides

■ News in Brief

Source: CCM International

Crop Main pests/disease Affected area (‘000 ha.) Occurrence time forecast

Rice

Yellow rice borer 233.3 Sep.-Nov.

Chilo simplex 40.0 Sep.-Nov.

Rice hopper 666.7 Sep.-Nov.

Rice leaf roller 433.3 Sep.-Nov.

Rice sheath blight 533.3 Sep.-Nov.

Rice blast 300.0 Sep.-Nov.

Rice bacterial leaf streak 100.0 Sep.-Nov.

Source: CCM International

Pest and disease situation and forecast in Guangxi

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R&D, announced to mass produce the product in 2010.

Zhejiang Province, the main pesticide production base in

China, produced 268,906 tonnes pesticides in the first eight months this year and sold 249,034 tonnes in the same period, among which 117,789 tonnes were exported.

Chongqing Wanzhi Jufeng Zoology Fertilizer Co., Ltd.’s first-stage

ecological compound fertilizer base with 350,000t/a capacity was put into operation on 24th September. Upon the completion of the whole base, it will achieve 1 million tonnes designed capacity.

The output value of China’s chemical pesticides industry

reached USD114.8 million n August this year, up 1.1% year on year, and the accumulative output value in the first 8 month this year was USD1.3 billion, up 0.6% from the same period last year.

The National Agro-tech Extension and Service Center released that

it was seeking to cooperate with pesticide producers to establish professional pesticide application teams to promote the safe usage and proper application technology of pesticides. These services teams will be named under related pesticide producers.

China will enhance the mechanization of potato

production in the coming years, aiming to raise the comprehensive mechanization rate of potato production to 40% in 2020. At present, the share of tractor ploughing reaches 36.7%, and that of the mechanical sowing and harvesting is about 10%.

According to statistics from Statistics Bureau of Jiangsu

Province, the pesticide consumption in Jiangsu has witnessed continuous decrease since 2006. The province’s pesticide consumption in 2008 was 3% less than that of 2007, and the consumption this year is estimated to drop by 5% over 2007.

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