Export tax rebate rate increase

Recently, the Ministry of Finance introduced some product export tax rate adjustment, is being tapped by the market, textile, clothing, phosphorus chemical industry, sodium tripolyphosphate, monosodium glutamate and other products, the export tax rebate rate of the increase, both caused the market focus. It is understood that dicamba herbicide also usher in an increase in export tax rebate rate, from the previous 9% rose to 13%, the basic realization of full tax rebates, will help improve the industry gross margins and export demand.

As the resistance of other pesticides such as glyphosate is becoming more serious, the climate of dicamba is better and the market supply and demand are relatively balanced. It is understood that Monsanto's dicamba-tolerant genetically modified soybeans and cotton crop varieties have been approved by the United States Department of Agriculture. Large-scale commercial promotion this year will drastically increase demand for dicamba, and the potential market scale is expected to reach 10 billion yuan.

The Central Rural Work Conference held at the end of December 2014 clearly stated that we must speed up the process of agricultural modernization, actively develop appropriate scale operations, and guide the orderly circulation of land management rights. The agency expects that the 2015 document No. 1 may again focus on modern agriculture. With the gradual advancement of agricultural modernization, the scale of planting and the degree of intensification have increased, and the use of herbicides has increased substantially. The proportion of pesticides in products has gradually increased. According to statistics, in 2013, domestic herbicide production was 1,784,500 tons, a year-on-year increase of 9%, accounting for 52% of the total pesticides. Natural environment, geographical factors, economic factors and other factors promote the demand for herbicides, and the industry has great potential for development.

As a highly effective and low-toxic herbicide, dicamba has the characteristics of strong herbicidal power, rapid drug efficacy, low dosage, moderate sustained effect, and high economic benefit. Due to the long-term application of glyphosate, the problem of weed resistance is highlighted and reconstitution with dicamba is the best solution to the problem. According to the agency's forecast, the total cultivated area of ​​dicamba-resistant GM soybeans will reach 50 million hectares in 2017. The future market demand will increase from 15,000 tons to about 50,000 tons, showing rapid growth.

As a major producer of dicamba, China has a total production capacity of nearly 10,000 tons and is mainly used for export. Considering the limited new capacity in the world, it is estimated that the total capacity of the industry in 2017 will be only 30,000 tons while the global demand will reach 50,000 tons. With the rapid growth of demand, the business climate will continue to improve and prices are expected to continue to rise. Related companies said that the Ministry of Finance will increase the export tax rebate rate, will help domestic companies to seize the global market share, giving companies new opportunities for development.

In terms of the company, Yangnong Chemical is the leading domestic straw ranch, and Nantong's 5,000-ton new capacity project is expected to be put into production in the first quarter. The total production capacity will increase to 6,500 tons, accounting for approximately 30% of the global market share. According to the agency's calculation, after full production, it will increase revenue by more than 800 million yuan and net profit of about 150 million yuan, which is nearly 40% thicker than in 2013. In addition, the controlling shareholder of the company is the Sinopec Group, a state-owned enterprise, and there is an expectation of asset integration. At present, Sinochem Group has officially started the integration of its pesticide business, and its pesticide business-related assets will be integrated into Sinochem International. The market expects the company to be included in the next integration plan of Sinochem Corporation and to inject other high-quality assets. Evergreen has a diced capacity of about 2,000 tons and the market is in good condition. At present, the company is considering expanding its production capacity with a target of 2,000 tons of new production capacity. By virtue of its long-term cooperative relationship with major international customers, the company will gain market share further.