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Article: How are the environmental and regulatory challenges facing glyphosate impacting its global market and other non-selective herbicides?
20 May 2020
According to latest research by Phillips McDougall published in
the AgrAspire suite of interactive data explorers
the global market for glyphosate totaled an estimated $5,325
million in 2018 representing a +4.2% increase over 2017.
Global Glyphosate Market ($m.)
Glyphosate prices continued to rise in 2018, albeit at a reduced
rate when compared to the approximate 25% increase between
2017/2016. A key driver in this continues to be the environmental
crackdown on manufacturers in China, as well as governmental
polices aimed at consolidating the Chinese market. This regulation
also covers the phosphate supply market - a key intermediate in the
production of glyphosate.
Indications of flat to moderately declining volume demand for
the active in 2018 have only been moderately offset by price
increases, albeit at a diminishing rate as the market seeks to
re-equilibrate following regulatory concerns over the ai. This has
benefitted the other major amino acid herbicide glufosinate, which
is estimated to have increased by +22.1% in 2018 to reach $916
million in 2018.
Overall, the US saw a 5% decline in the volume of glyphosate
used from 2017 to 2018 - prices increasing slightly by 8%; however
there was some variance across different crop groups:
Global Glufosinate Market ($m.)
The global glufosinate market has been influenced in part by a
pricing mix effect in relation to the recent rises in glyphosate
prices. The increased cost of manufacture for glyphosate in China
resulting from regulatory action has also had the effect of making
glufosinate, which is more expensive to produce and thus a higher
cost product, more competitive in the market. Issues surrounding
glyphosate resistance and the uncertainty pertaining to the future
regulatory system are also driving strong growth of glufosinate.
The performance of the LibertyLink trait conferring tolerance to
glufosinate has also contributed to growth in 2018, with the global
total of all seeds containing the trait estimated to have risen by
+17.2% to $1,361 million in 2018.
In the domestic China context, 2018 saw a big increase in the
volume of glufosinate used across several crop groups:
In terms of other non-selective herbicides 2,4-D grew strongly
during 2018, rising by +11.5% to reach $748 million. 2,4-D
continues to perform well as an alternative to glyphosate in light
of the above factors influencing the glyphosate market and
following the continued market penetration of Enlist (glyphosate
and 2,4-D) traits in cotton, and the initial US launch of Enlist
maize during the 2018 planting season.
Global 2,4-D Market ($m.)
Additionally, the 2,4-D market benefitted from a recovery in the
Brazilian inventory situation, particularly in the soybean sector
as well as robust performance of the Asian cereal sector where
increases in China and India offset a decline in the Australian
cereal herbicide market following drought.
Dicamba has also performed well during the year, rising by an
estimated +13.8% to reach $388 million, boosted by the continued
strong performance of the Xtend trait system from legacy company
Monsanto which was initially launched as Genuity Bollgard II
XtendFlex cotton, followed by the 2016 launch of Roundup Ready 2
Xtend soybeans.
Dicamba Market ($m.)
XtendFlex provides tolerance to dicamba as well as glyphosate
and glufosinate, which has been another positive factor in the 2018
performance of those ais.
Detailed market analysis of the performance of chemical
classes and their constituent active ingredients can be found in
the Product Section of Phillips McDougall AgriService
report.
In terms of the regulatory situation and outlook for the ai, the
latest situation according to IHS Markit's crop protection news
service Agrow is:
For the last couple of years, glyphosate has been occupying
centerstage in the US and the EU, albeit in different contexts. In
the US, legal cases involving the herbicide have been regularly
making headlines. In the EU, the regulatory uncertainty surrounding
the active ingredient has caused a lot of debate.
In the US, there have been three judgments against Bayer. In
August 2018, a California jury awarded a plaintiff $280 million,
which a judge subsequently reduced to $80 million. In March 2019, a
federal jury awarded $80 million, which a judge later reduced to
$25 million. In a third case, a California jury awarded $2 billion
to two plaintiffs. But that was reduced to $87 billion by a judge.
Bayer is pursuing further appeals. Meanwhile, the US EPA again
declared glyphosate as non-carcinogenic and has prohibited product
labelling calling glyphosate carcinogenic. The EPA itself has been
taken to court on its decision to re-register glyphosate.
In the EU, glyphosate was renewed for five years instead of the
usual period of 15 years. Its renewal ends in December 2022. In the
meantime, some member states, including Austria, France, Germany
and Luxembourg, have announced their intention to completely phase
out the herbicide.