Glyphosate Market Study

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Glyphosate Market Overview

Global Market of Glyphosate

Chinese Market of Glyphosate

Production Trends of Crops & Energy Resources

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 Glyphosate Overview

Background information of glyphosate.

Glyphosate is a widely used herbicide used for control of annual and perennial plants, especially effective in weed control programs. It is an
organophosphate chemical compound containing carbon and phosphorous. Roundup herbicide is the first commercial glyphosate product
introduced and patented by Monsanto in 1974, which since then have become the most widely used herbicide in the world.
Glyphosate is nonvolatile, water-soluble, and odorless. Glyphosate-based herbicides are broad-spectrum and nonselective. Some crops have
been genetically modified to be resistant to the effects of glyphosate, allowing glyphosate to become selective in these genetically modified
crops. For example, glyphosate-tolerant soybeans are an example of such a plant.

How does it work?

Most plants need growth enzyme EPSP synthase to mature. Glyphosate-based
herbicides inhibit such enzyme to stop further production of proteins necessary for plant
growth. As a result, plants wilt and die off due to lack of growth nutrients.
The herbicide starts its biochemistry reactions from a plant’s leaves and soft stalk tissue.
It is then absorbed and transported throughout the plant surface. This biochemistry
pathway only exists in higher plants and microorganisms but not in animals. Since
glyphosate is delivered and accumulates in actively-growing parts of the plant, no parts
of the plant survive after glyphosate takes effect. In addition, glyphosate-based
herbicides are only effective on actively growing plants.

Chemical Names Molecular Structure & Illustration

Glyphosate; Phosphonomethyl amino acetic acid.
Glyphosate

Commercial Names
RoundUp; Glyphomax; Expert; Razor; Landmaster.

Chinese Names
草甘膦;膦甘酸;有机磷除草剂. Phosphonoglycine herbicide in acid and salt form

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 Glyphosate Overview

Glyphosate is the most effective herbicide in the market.

The commercial versions of glyphosate products can be either in salt or acid form. Glyphosate application are widespread and favored due to
ease of application and superior levels of effectiveness compared to other herbicides. Although major suppilers of commercial glyphosate
products claim their products have the lowest toxicity in the market, long-term exposure to glyphosate can still cause cancer.

Glyphosate Formulations Glyphosate Applications Glyphosate Toxicity

• Ammonium salt • Grass • EPA toxicity class II

• Isopropyl amine salt • Broadleaf • General Use Pesticide
(GUP)
• Glyphosate acid • Woody plants
• Effects of glyphosate on
• Potassium salt • Clover human health and the
• Agriculture environment depend on
how much glyphosate is
• Horticulture present and the length
• Silviculture and frequency of
exposure
• Garden maintenance

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Glyphosate Market Overview

Global Market of Glyphosate

Chinese Market of Glyphosate

Production Trends of Crops & Energy Resources

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 Global Overview

The promising global glyphosate market is dominated by a few

multinational companies with the strongest R&D programs.
The global glyphosate market, by the end of 2008, was valued at $22.53 billion usd. Additionally, glyphosate has the dominant majority of the
herbicide market in the world. Because of glyphosate’s significant market share in the crop protection sector, industry players around the world
pay close attention to its sales.
Monsanto is the first company began using glyphosate as a herbicide since 1974. Many glyphosate-based herbicide products have been
introduced by companies worldwide since then. However, it is those companies with superior R&D capabilities and strong distribution channels
share top market shares in the crop protection industry.

Global Glyphosate Market Share by Revenue (2008)

FMC Arysta Lifescience United Phosphorus

Others
2.0% 1.7% 1.3% Top three companies in the industry held nearly 50% of
1.8% Monsanto
Cheminova the glyphosate market in 2008:
18.2%
2.1%
Sales Revenue Market Share
Sumitomo
Chemical 1) Monsanto $4.1 billion usd 18.2%
2.5%
2) Syngenta $3.7 billion usd 16.6%
Makhteshim Agan
6.3% 3) Bayer $2.7 billion usd 12.1%
Dupont
6.4% Although top glyphosate manufacturers are almost
Syngenta
16.6% exclusively Western multinational corporations, high
BASF volatility in glyphosate prices in the past couple of years
7.3% has been a potent capital investment driver for small to
medium-sized manufacturers around the world, especially
in China. As global demand for glyphosate continues to
Nufarm
9.9%
grow and glyphosate prices rebound further from recent
Bayer lows, manufacturers of all sizes are prepared to compete
12.1%
Dow head-on with their upgraded production capabilities.
11.8%

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 Global Overview

Glyphosate markets worldwide have experienced a roller-coaster

ride in the past ten years. However, the global market shall recover
steadily from its recent lows in the near future.
The wide spread application of glyphosate as the choice for crop weed control did not take its footing until Monsanto’s patent on glyphosate
herbicide expired in 2000. Since then, both weed control effectiveness and a broad range of product availability have contributed to an
accelerated glyphosate demand and sales volume since 2000. Prices of glyphosate began its steep ascend in the forth quarter of 2007.
Eventually, glyphosate prices skyrocketed in the first half of 2008. Both demand and sales for glyphosate started to grow at slower paces as
global capacity gradually increased over the years along with price-sensitive changes in the herbicide market. Recent recovery of glyphosate
prices, along with general improvement of the overall global economy, suggests glyphosate industry growth shall continue over time. Sales for
glyphosate will pick up as global demand growth rate accelerates in the next couple of years.

Glyphosate Global Sales Forecast Glyphosate Global Demand Forecast

(1997 – 2010E) (2000 – 2010E)

1,200,000 90.00% 1,200,000 80.00%

80.00% 70.00%
1,000,000 1,000,000
70.00% 60.00%
800,000 60.00% 800,000
50.00%
50.00%
600,000 600,000 40.00%
40.00%
30.00%
400,000 30.00% 400,000
20.00% 20.00%
200,000 200,000
10.00% 10.00%
0 0.00% 0 0.00%
1997 2000 2002 2004 2006 2010E 2000 2002 2004 2006 2008 2010E

Tons Percentage Increase Tons Percentage Increase

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 Global Overview

Glyphosate markets in North America and Europe will be stagnant.

In contrary, growth momentum in the Latin American market will
remain unchanged.
Herbicide Sales Revenue Trend in World Regions North America
(2005 – 2015E) The glyphosate markets in the United States and Canada
are expected to experience the least amount of growth in the
coming years. The North American market is highly
[$ billions usd] saturated where almost all crops planted in this region use
herbicides already. In order for glyphosate market to grow in
this region, glyphosate products must compete head-on with
$8.0 other classes of herbicides. Such fierce competition will
$7.0 allow minimum amount of growth in this developed market.
The only hope for growth is the remaining crops pending
$6.0 genetic modification to increase yield.

$5.0 Europe
The European glyphosate market is estimated to lead a
$4.0 similar trend as in the North American market. Growth will
decline, but slightly stronger than in the North American
$3.0
market. Two major obstacles that hinder glyphosate growth
$2.0 in the European market are stricter environmental rules and
Europe’s opposition against use of genetically modified
$1.0 crops.
$0.0 Latin America
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015E The Latin American market includes countries such as Brazil,
Argentina, Mexico, Chile, and other Caribbean islands. This
North America Europe Latin America market has the most potential for growth in the three regions
illustrated. The glyphosate market in this region has been
fluctuating around 60% of market sizes of North America &
Prices of glyphosate peaked to historical highs Europe. It shall grow to $6 billion usd by 2015. Demand for
in 2008, significantly contributing to spike in food and land will be the main catalysts driving growth in the
sales revenue in the same year. Latin American glyphosate market.

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 Global Overview

All regions around the world still have a large potential for
glyphosate market share growth for many years to come.

Herbicide Market Shares in World Regions North America

Since the regional market of the United States and Canada
has the most herbicide saturatation, it also enjoys the top
80.00% glyphosate herbicide market share amongst its peers.
Glyphosate sales boast over half of the herbicide market.
70.00% This strong market position attributes to considerable
increases in genetically modified crops that are resistant to
60.00% glyphosate in recent years.
50.00% Europe
Low entry barrier in glyphosate herbicide manufacturing has
40.00% created a large number of glyphosate manufacturers in
Europe. In addition, popularity of no-till farming in Europe
30.00%
contributed to interests in using the non-selective glyphosate
20.00% herbicide in crop farms. The glyphosate-based herbicides
contributed 40% of European herbicide revenue in 2008.
10.00%
Latin America
0.00% Crops grown in this region is comparable with that of North
Glyphosate Triazines Sulphonyl Ureas Others America. Market share of glyphosate in Latin America is
almost identical to that in North America, about $2.3 billion
Global North America Europe Latin America usd in 2008. The Latin American glyphosate market is well-
positioned for healthy growth with assistance from
increasing trend in significant demand for genetically
modified crops in this region.
Although glyphosate has already become a
popular herbicide around the world, there is
still a promising potential for its market growth.

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 Global Overview

Regional markets characteristics comparison.

Global Glyphosate Market Regional Summary

Nor th A meric a Eu rope La tin A meri ca

Numb er o f Co mpet ition 40 - 50 45 - 55 30 - 40

* Six leading multinational innovative companies

Type s of Com peti tors * Multinational or national generic companies
* Regional generic companies

* Direct product distribution

Mode of Dist ribu tion * Stand-alone distributors
* In-house sales for other regional and multinational generics

Tier 1: Majority market shares leaders

Tier 2: Group of companies with significant market shares, but
Leve ls o f Co mpet ition
less than those of the market leaders
Tier 3: Local manufacturers and market leaders

* Horticultural gardeners and nurserymen

Typi cal End- User s * Agricultural property owners
* Farmers

* Price
Comp etit ive Adva ntage s * Quality of products
* Extensive product portfolio

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Glyphosate Market Overview

Global Market of Glyphosate

Chinese Market of Glyphosate

Production Trends of Crops & Energy Resources

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 Chinese Market

Increasing domestic consumption of glyphosate is the only way to

avoid any harms from over-capacity in China.
The Chinese glyphosate market is characterized by an export-oriented development, with majority of demand coming from North America,
Europe and Latin America. Glyphosate manufacturing capability in the Chinese market is several multiples of domestic consumption. Currently,
China has the dominant position in global glyphosate supply, accounting for 70% of total market share of glyphosate worldwide.
Although China enjoys a lion’s share of the global glyphosate market, its glyphosate formulation production technology is comparatively
ineffctive, causing Chinese manufacturers to sell at minimum prices in the global market. Additionally, unavailability of foreign country
registrations and weak international sales channels indicate that majority of the glyphosate sales profit disappear in the supply chain before
landing in the hands of Chinese manufacturers.

China Glyphosate Market Capacity and Demand (2007 – 2010E)

[tons]
Chinese domestic demand for glyphosate is at its
900,000 minimum compared to total capacity. It is estimated
800,000 that by the year of 2010, total glyphosate capacity in
the Chinese market will reach 800,000 tons from
700,000 400,000 tons in 2007, whereas domestic demand for
600,000 glyphosate will be a disappointing 93,000 tons from
707,000 50,000 in the same time period. Capacity increases
500,000
is expected to accelerate faster than domestic
400,000 530,000 demand growth.
300,000 While the Chinese glyphosate market will continue
361,000
200,000 350,000 to develop & global demand for glyphosate-based
herbicides shall remain strong for years to come, it
100,000
is important for China to accelerate its own
0 glyphosate consumption. Domestic sales
2007 2008 2009E 2010E development will counter the effects of foreign
market over-saturation and high price volatility in the
Capacity Demand event of global or regional downturns.

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 Chinese Market

The Chinese glyphosate industry is highly fragmented with only a

handful of sizeable players in the market.

• There is about 40 top glyphosate

manufacturers in the Chinese market Glyphosate Capacity by Location
• Majority of manufacturers in the
glyphosate industry are located in the [tons]
Yangtze River Delta. Top geographical
locations include:
‒ Zhejiang (150,000 tons)
‒ Jiangsu (92,000 tons) Beijing

‒ Shandong (40,000 tons)

‒ Anhui (22,000 tons) 40k

‒ Sichuan (15,000 tons) 92k

22k Shanghai
• The actual number of total official and 15k
150k
unregistered glyphosate manufacturers
across China is several hundreds
• Tougher environmental standards and Other Provinces: 63k
fierce competition have facilitated plant Guangzhou

closures and consolidation throughout

the industry in recent years

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 Chinese Market

Glyphosate-based herbicide application in China will grow over time

to become comparable to other regions around the world.
Use of agrochemical in China is quite different from norms in North America, Europe and Latin America. Pesticide use in China is almost 50% of
all agrochemical used in the country, whereas herbicide use is the majority in other countries. Since glyphosate-based herbicide is the most
effective crop protection herbicide with lower toxicity, demand growth for glyphosate in China is very promising.
There are two main production methods for glyphosate-based herbicide in China: aminoacetic acid and diethanolamine (IDA). Only the IDA
method is used by manufacturers in North America, Europe and Latin America. Production cost with the IDA method fluctuates positively with
the price of oil. Raw material cost increases will also affect production cost using the aminoacetic acid method.

Agrochemical Usage Comparison Glyphosate Production Costs in China

(China vs. Developed Countries)

60% 70%

50% 60%

50%
40%
40%
30%
30%
20%
20%
10% 10%

0% 0%
Pesticides Fungicides Herbicides Others Key Ingredient Phosphorous Caustic Soda Formaldehyde Others

China Developed Countries Aminoacetic Acid Diethanolamine

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 Chinese Market

Glyphosate prices are expected to be much less volatile in 2010.

Glyphosate Price Trend in China (2004 – 2008)

[$ usd/ton] China won glyphosate anti-dumping case in

16,000 4 Monsanto shut down a glyphosate production
14,000
12,000
10,000
8,000
1 3
6,000 2
4,000
2,000
-
Prices of glyphosate have experienced a roller-coaster ride in the past
couple of years, reaching as high as $14,600 usd per ton near mid-2008
before crashing to their average levels from previous years. Although
there have been recent price rebounds, glyphosate prices are not
expected to recover significantly until well into 2010.
Three main factors that will drive a healthy growth of the global
glyphosate market are: increasing conversion of genetically modified
crops, adoption of no-till farming and biofuels initiatives worldwide.
Glyphosate-based herbicides will continue to throne the de facto status
of crop protection agrochemical in many years to come.
1 Argentina.
2
line with annual yield capacity of 100,000 tons
in 2006 because of business restructuring and
5 tougher environmental standards in the United
States. Much of this demand was then sourced
from China at lower prices than Monsanto’s
original production costs.
The US Senate passed the $2.3 billion usd bill
3 to promote biofuels program in the United
States.
Planned capacity expansion during the same
period would reach 400k tons due to high
industry margin from price increases.
Monsanto to invest $196 million usd in a
Luisiana glyphosate production plant,
4 increasing global capacity by 20%.
Monsanto announced re-opening of 100k ton
production line.
Chinese domestic prices for glyphosate
surpassed $14,000 per ton in the second
quarter of the year.
Brazil reduced anti-dumping tax on all Chinese
glyphosate products from 11.7% to 2.9%.
5

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 Chinese Market

Summary of top Chinese glyphosate manufacturers.

Com pan y Na me Chin ese Nam e Loca tion 2009 Pro duc tion Ca pabi lit y In crea se in C apa bili ty in 2 008 Glyp hos ate Pro duct ion Met hod
Zhejiang Wynca Chemical Group 新安股份 Zhejiang 7.1 0.9 Aminoacetic Acid
Nantong Jiangsha Agrochemical & Chemicals 江山股份 Jiangsu 2.7 3 Aminoacetic Acid & IDA
Shandong Weifang Rainbow Chemical 山东润丰 Shandong 2 0 Aminoacetic Acid & IDA
Zhejiang Changxing First Chemical 浙江长兴 Zhejiang 2 0 Aminoacetic Acid & IDA
Nanjing Red Sun Group 南京红太阳 Jiangsu 2 1.5 IDA
Anhui Huaxing Chemical Industry 华星化工 Anhui 1.5 1 IDA
Jingma Chemicals 浙江捷马 Zhejiang 1.5 1 IDA
Zhejiang Jinfanda Biochemical 浙江金帆达 Zhejiang 1.2 0 Aminoacetic Acid
Jiangsu Good Harvest-Weien Agrochemical 江苏好收成 Jiangsu 1.2 1.2 IDA
Fujian Sannong Group 福建三农 Guangdong 1 0 Aminoacetic Acid
Hubei Taisheng Chemical 湖北泰盛 Hubei 1 1 Aminoacetic Acid
Jiangsu Suhua Group 江苏苏化 Jiangsu 1 0 Aminoacetic Acid
Shandong Binnong Technology 山东滨农 Shandong 1 1 Aminoacetic Acid
Sichuan Leshan Fuhua Agrochemical Technology 乐山福华 Sichuan 1 1.5 Aminoacetic Acid
Zhejiang Linghua Industry 浙江菱化 Zhejiang 1 0 Aminoacetic Acid
Shandong Vicome Greenland Chemical 胜邦绿野 Shandong 1 0 Aminoacetic Acid & IDA
Jiangsu Kuaida Agrochemical 江苏快达 Jiangsu 1 0 IDA
Jiangsu Anpon Electrochemical 江苏安邦 Jiangsu 1 0 IDA
Jiangsu Yinyan Specialty Chemicals 江苏银燕 Jiangsu 1 0 IDA
Shandong Qiaochang Chemical 山东侨昌 Shandong 1 0 IDA
Zhejiang Biok Kaipu Chemical 拜克开普 Zhejiang 1 0 IDA
Hubei Sanongda Group 沙隆达 Hubei 0.6 1.5 Aminoacetic Acid & IDA
Jiangsu Suzhou Jiahui Chemical 苏州佳辉 Jiangsu 0.6 0 IDA
Jiangsu Taicang Chemical 太仓农药 Jiangsu 0.6 0 IDA
Guangxi Zizhu Chemical 广西自主 Guangxi 0.5 0 Aminoacetic Acid
Jiangxi Electrochemical 江西电化 Jiangxi 0.5 0 Aminoacetic Acid
Shanghai Hujiang Biochemical 上海沪江 Shanghai 0.5 0 Aminoacetic Acid
Anhui Chloro Alkali Chemical Group 安徽氯碱 Anhui 0.5 0 IDA
Sichuan Beier Group 四川贝尔 Sichuan 0.5 2.2 IDA
Hebei Golhil Chemical 河北奇峰 Hebei 0.3 0.8 Aminoacetic Acid
Jiangsu Changshu Agrochemical 常熟农药 Jiangsu 0.3 0 Aminoacetic Acid
Hebei Wuhan Zhong Xin Chemical 武汉中鑫 Hubei 0.3 0 IDA
Shanghai Kaipu Fine Chemical 上海开普 Shanghai 0.3 0 IDA
Henan Anyang Anlin Biochemistry 安阳林药 Henan 0.2 0 Aminoacetic Acid
Anhui Haifeng Fine Chemical 安徽海丰 Anhui 0.2 0 IDA
Hebei Baoding Zhongyuan Green Agrochemical 中原绿农 Hebei 0.1 0 Aminoacetic Acid
Anhui Guangxin Agricultural Chemicals 安徽广信 Anhui 0 2 Aminoacetic Acid
Jiangsu Yangnong Chemical Group 扬农化工 Jiangsu 0 1.5 IDA

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Glyphosate Market Overview

Global Market of Glyphosate

Chinese Market of Glyphosate

Production Trends of Crops & Energy Resources

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 Production Trends

Positive outlooks for the following common crops and energy

resources indicate a confident future for the glyphosate market.
Cotton Rice Soy Bean
(thousand 480-lb bales) (thousand tons) (million tons)

130,000 680,000 260

660,000 240
120,000
640,000 220
110,000 620,000
200
600,000
100,000 180
580,000
160
90,000 560,000
140
540,000
80,000
520,000 120

70,000 500,000 100

1990 1993 1996 1999 2002 2005 2008 1990 1993 1996 1999 2002 2005 2008 1990 1993 1996 1999 2002 2005 2008

Wheat Coal Crude Oil

(million bushels) (million short tons) (thousand barrels per day)

26,000 8,000 90,000

25,000 7,500
85,000
24,000 7,000

23,000 80,000
6,500

22,000 6,000 75,000

21,000 5,500
70,000
20,000 5,000

19,000 4,500 65,000

1990 1993 1996 1999 2002 2005 2008 1990 1993 1996 1999 2002 2005 2008 1990 1993 1996 1999 2002 2005 2008

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 Data Sources

Glyphosate market study data sources.

Monsanto
Monsanto is an agricultural company producing leading seed as well as small-acre crops like
vegetables. Monsanto also produces leading in-the-seed trait and the world's best-selling herbicide.
Seeds and Genomics & Agricultural Productivity are the two main business segments.

United States Department of Agriculture

The USDA’s mission areas include: Farm and Foreign Agricultural Services; Food, Nutrition and
Consumer Services; Food Safety; Marketing and Regulatory Programs; Natural Resources and
Environment; Research, Education and Economics & Rural Development.

United States Department of Energy

The Department of Energy's overarching mission is to advance the national, economic, and
energy security of the United States; to promote scientific and technological innovation in support
of that mission; and to ensure the environmental cleanup of the national nuclear weapons complex.

United States Environmental Protection Agency

EPA's mission is to protect human health and the environment. To accomplish this mission, the US
EPA develops and enforces regulations; gives grants; studies environmental issues; sponsors
partnerships; teaches people about the environment & publishes related information.

Thomson Reuters
Thomson Reuters is the world’s leading source of intelligent information for businesses and
professionals. It combines industry expertise with innovative technology to deliver critical
information to leading decision makers in the financial, legal, tax and accounting, scientific,
healthcare and media markets, powered by the world’s most trusted news organization.
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