Pesticides: the new Chinese hegemony. Le Monde Report
A recent survey conducted by a group of experts on behalf of NGOs reveals how many pesticides China produces each year. All the details
According to a survey presented on Tuesday and conducted by a group of experts on behalf of NGOs, China produces almost half of the 4 million tons of pesticides produced worldwide each year.
These are real giants like the global agrochemical industry has never seen before: in just twenty years, Chinese pesticide producers have come to dominate this market – estimated at 61 billion dollars in 2020 (54 billion euros ) – representing over 40% of its value.
A group of French experts – writes Le Monde – has warned against this evolution on which the future of human nutrition depends: the Bureau d'analyse sociétale pour une information citoyenne (Basic, a research office) has carried out a survey published on Tuesday 30 November on behalf of Pollinis, who fights against the extinction of bees, and the Catholic Committee against hunger and development (CCFD-Terreolidire), which sheds new light on the sector.
Thousands of economic and financial data have been compiled to draw a global picture of the value of the pesticide sector.
“In twenty years, China has grown exponentially on the international market, to the point of producing almost half of the 4 million tons of pesticides produced every year in the world”, summarizes Christophe Alliot, co-founder of Basic. "Multiplying the value of its sales by eleven, China became the first exporter in 2018, with 5.2 billion dollars, surpassing Germany" and thus drawing a new geopolitics. Chinese exports are destined, in order, to Brazil, Thailand and the United States. Australia, Nigeria, Indonesia and Vietnam follow.
India also emerged, increasing its exports of low-cost plant protection products fourteen times between 2000 and 2020. This shift in production to Asia has worried the European Commission for several years. “Most of the active substances in plant protection products marketed in the European Union are produced abroad. Increasingly, product formulation is also shifting to non-EU countries, ”he reported in 2017.
Lack of transparency
The global agrochemical industry has undergone an unprecedented concomitant concentration. In 2020, four heavyweights dominated: Bayer-Monsanto, Syngenta, Corteva and BASF. Among these so-called "integrated" players, because they control the entire value chain, from research and development to product distribution, the German Bayer took over the French CropScience in 2008, and then Monsanto in 2018. For their part, the Americans Dow Chemical and DuPont merged to create Corteva in 2019.
Switzerland's Syngenta was bought in 2017 by state-owned ChemChina, a leader in the Chinese chemical industry, for $ 43 billion – the largest ever acquisition by the Middle Kingdom overseas. European Competition Commissioner Margrethe Vestager ruled at the time that the takeover did not lead to a dominant position, in exchange for ChemChina divestments of products (fungicides, herbicides and insecticides for cereals, or generic pesticides undergoing development).
Since then, Syngenta has continued to grow, as has the company that controls it. In 2020, the much-suspected merger between ChemChina and the other Chinese giant, Sinochema, was confirmed. “It will create a giant equivalent to the merger of all American and European companies. China wants to create the largest chemical cluster in the world, ”Alliot said. And this without transparency.
In July 2021, the Wall Street Journal reported Syngenta's expected listing on the Shanghai STAR tech stock market, which was expected to raise $ 10 billion. This record listing was put on hold in October 2021 because the group's financial information was out of date.
Historical groups, mainly American and German, which accounted for 78% of global pesticide sales in 2014, according to data released Tuesday, November 30, recorded only 67% in 2017 and American investment funds (BlackRock, Vanguard, State Street, Capital Group and Fidelity) present in the capital of Western leaders demand constant profitability, while the development costs of the new active substances have doubled in twenty years.
Unprecedented alliances
The percentage of pesticides protected by patents has halved. Generics, which made up 30% of the market in 2000, now account for 70%. Their price per kilo ($ 23) is three and a half times lower than the patented products ($ 81). The sector "is vital only because it does not pay the costs associated with their negative impact [clean-up, investments in agroecology, health] and because it receives state aid", denounce the NGOs.
The novelty is in fact that China also dominates the generics market. "The products used in Europe are often not competitive in the regions of the planet that accept molecules banned by us", underlines Christian Janze, expert of the EY study in Germany, "and, in emerging countries, low-intensity generics are more readily used. research and development".
Behind the top three generics (American Albaugh, Australian Nufarm and Dutch Nutrichem), the Chinese now occupy the next seven positions in the top 10, with entities that are still independent of ChemChina, such as Shandong Weifang Rainbow Chemical or Nanjing Red Sun. In 2011, Chinese capital acquired the largest player in the sector, the Israeli Adama which, merged with Syngenta, allowed to reach 15 billion dollars in sales by 2020. "We believe that the Chinese have invested huge capabilities for making generics with large economies of scale, ”says Alliot.
This bulimia is already pouring into high-tech products, allies of the sustainable and precision agriculture of the future. Unprecedented alliances are forging between agrochemical groups, seed companies, machine manufacturers and digital technology specialists, Janze points out.
China's rise to power in the agrochemical sector is due to the fact that the food situation of its 1.4 billion inhabitants is fragile. "Its internal resources in arable land are stagnant and the population demands quality," notes Sébastien Abis, specialist in agricultural geopolitics and member of the Demeter club. To achieve food autonomy, "the country must therefore rely on science and technology to verticalise yields and boost precision agriculture, after seeking its food security abroad".
A "sustainable approach"
According to Alliot, through the agreement with Syngenta, she was able to "get her hands on the heart of the reactor" in Europe, namely the patents to develop precision agriculture, but also seeds and genetic engineering technologies. . "It is part of a broader political strategy pursued by the Chinese state, which invests twice as much public money in agricultural research each year as its American counterpart," explains the Basic report.
The European Commission, for its part, has set the goal of a 50% reduction in the use of pesticides by 2030, while Europe remains the leader in their exports (5.8 billion dollars in 2019). Questioned, the German giants say they are aiming for a "sustainable approach". Bayer points out that "since 2016, it has only marketed plant protection products whose active ingredients are registered in at least one OECD country".
BASF, for its part, says it is moving away from mass production, which has become less profitable. “Our investments focus on offerings that combine seeds, crop protection and digital technology,” explains the group. It is targeting “four segments” in crops that account for 70% of the world market: soy, corn and cotton in North and South America; wheat, canola and sunflower in North America and Europe; fruit and vegetables all over the world and rice in Asia.
Before taking over Syngenta, China was lagging behind in the transition to less chemical agriculture, recalls Jean-Joseph Boillot, associate researcher at the Institute for International and Strategic Relations (IRIS) and author of Utopie made in monde. Le sage et l'économiste , edited by Odile Jacob.
During this transition, he warns, "his model may continue to export huge overcapacities of pesticides." Over the next ten years, “there is a clear risk that Africa will become the world's dustbin in this sense”. The continent is already suffering from the spread of products now banned in Europe. With Chinese exports, the risk is increased by the fact that a third of the volume of pesticides leaving the factory "is considered illegal because it does not comply with the safety regulations set by the government," the Basic points out.
The disparities in GMO practices already observed will become more pronounced, Abis adds: “Will China be clean at home and less clean elsewhere? He will have to manage this strong internal contradiction. "
In Europe, too, the question of a new dependency arises. It remains the leading consumer continent of synthetic substances (worth 12 billion dollars in 2019) and France, within it, the first market for pesticides for agricultural use.
“The issue of the security of supply of essential molecules is still absent from the debate because we are used to being able to count on the security of deliveries and because we have grown up with full refrigerators. But if China becomes less cooperative, it is not impossible for problems to arise with the supply of agricultural raw materials, ”says Janze. According to him, the Middle Kingdom has a clear goal of mastering agricultural technologies because it has understood that the dominant power in the sector will have a significant influence in the world.
(Extract from the foreign press review by eprcomunicazione )
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/pesticidi-la-nuova-egemonia-cinese-report-le-monde/ on Sat, 04 Dec 2021 06:48:36 +0000.