The EU relicense vote for glyphosate is a relief for many European farmers, who don’t have a real alternative to the weed killer. However, to what extent are overseas exporters, like the largest glyphosate production nation China, are affected by the result?
The European Union has voted to relicense the controversial herbicide glyphosate, marketed as Roundup by agrochemical giant Monsanto, for another five years. This result represents an achievement with a bitter taste for the pesticide industry, which expected the 15 years initially relicense. However, the result is surely better than the total immediate ban claimed by glyphosate opponents such as environmental and human activists.
Commission, the European Union’s executive, said in a statement that 18
countries had backed its proposal to renew the chemical’s license. Nine
countries were against and one abstained.
European Union had been struggling for the past two years over the fate of the
popular herbicide, whose license was set to expire on Dec. 15, 2017. Notably,
glyphosate has been the best-selling weed killer In Europe by far. Total EU
sales of glyphosate-based products are around 1 billion euros per year.
Monsanto has a share of about 40 percent of the global market.
On the other hand, opponents of the glyphosate relicense in Europe felt disappointed as well, as the result of the voting demonstrates the preference of the European Union for the highly profitable pesticide industry rather than the health of the people and the environment.
Effects on EU markets
Many farmers in the European Union had already begun stockpiling Roundup, unsure about the future of the popular herbicide and lacking real alternatives. This has pushed the sales in Europe quite significantly. After all, there is no viable substitute, and banning the herbicide would have meant a lot more soil erosion in an expensive effort to control weeds and stop crop yields from falling too far.
In terms of what would happen if there is a ban on glyphosate in the EU, it would have global ramifications. Those wishing to import products to the EU would have to ensure that there are no detectable residues of glyphosate on their products.
Now, with the relicense of glyphosate, the uncertainty of farmers could be relieved so far, allowing the markets to turn back to normal.
The meaning for of the relicense for China
Glyphosate is the largest export commodity in China’s pesticide segment. For that, China's glyphosate industry highly depends on the overseas market, exporting about 85% of its output.
The major export destinations of Chinese glyphosate technical are Argentina, the USA, Brazil, Malaysia, and Indonesia while the major destinations of glyphosate formulations are Thailand, Australia, Vietnam, the USA, and Ghana. Hence, the EU is neither part of China’s most important glyphosate technical nor glyphosate formulations exports. Changes in the European Union would therefore only have a small impact on the export situation in China.
Monsanto lodged a charge to the EU in October 1995 for the first time about the dumping of glyphosate originated from China. The final ruling was made in 1998 and Monsanto won the case. The EU imposed a 24% anti-dumping tax on glyphosate originated from China. Later in 1998, the anti-dumping tax was increased from 24% to 48%.
In early 2003 the EU started the investigation of sunset review and expiry review on glyphosate originated from China. As a result of the investigation, all glyphosate producers of China have levied an anti-dumping tax of 29.9%, and the effective period was extended to 2008.
In order to enter the EU market, Chinese glyphosate producers, such as Zhejiang Wynca, have kept fighting with Monsanto and other companies in the EU, and finally won the case in June 2009. The EU then cancelled the 29.9% anti-dumping duty on Zhejiang Wynca's glyphosate.
In July 2012, the EU released its final judgment on the glyphosate anti-dumping case against Zhejiang Wynca. The investigating court ruled that the EU's anti-dumping measure on Zhejiang Wynca was invalid, and dismissed the EU Council's appeal entirely. Zhejiang Wynca got the final victory of the case.
CCM is China’s market intelligence provider for research into the agriculture, chemicals, and food % feed industry.
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