Zhitong Financial APP learned that Huaan Securities released a research report saying that the current price of glyphosate is at the bottom of history. The announcement of the approval of GM varieties means that GM commercialization is about to begin, and the commercialization and permeability of GM crops are expected to boost the demand for glyphosate. In addition, the fourth quarter is the peak season for traditional glyphosate demand, and glyphosate prices are expected to pick up as the overseas destocking cycle ends and enters the replenishment phase. Recommended concerns: Xingfa Group (600141.SH), Jiangshan shares (600389.SH), Guangxin shares (603599.SH), Hebang Biology (603077.SH), Xin'an shares (600596.SH).
The main points of Huaan Securities are as follows:
The results of the first trial of transgenic varieties have been made public, and the process of commercialization has been accelerated.
According to the regulations on the Safety Management of Agricultural genetically modified organisms and other laws and regulations, after genetically modified crops have obtained safety certificates, strict regional tests and production tests should be carried out in accordance with the provisions of national variety examination and approval laws and regulations. variety approval certificates can be obtained if they meet the standards. After obtaining the production and operation license, seed enterprises can carry out the production and operation of genetically modified seeds. Since 2019, China has successively approved 17 GM corn and 6 soybean safety certificates. In 2021, the Ministry of Agriculture and Village launched a pilot project for the industrialization of genetically modified soybeans and genetically modified corn which have obtained safety certificates for production and application. The public announcement of the first trial of genetically modified varieties means that the most critical link for enterprises to obtain production and business licenses has been opened. The publicity period of this examination and approval is one month. after the expiration of the publicity period, seed enterprises can apply for production and management licenses, and GM crops can be planted commercially as soon as next year.
The advantage of transgenic varieties is obvious, and the demand for glyphosate is expected to increase.
There are 23 glyphosate-resistant genetically modified maize varieties and 14 glyphosate-resistant transgenic soybean varieties on the preliminary list. According to the public, the yield of genetically modified corn increased by 0.005% muri 10.20% compared with ordinary corn, and the yield of genetically modified soybeans increased by 2.50% Murray 11.90%, with an average increase of 7.26%. In addition, the herbicidal cost of transgenic varieties is lower, and genetically modified soybeans can reduce the cost of weeding by 50%. Thus it can be seen that the planting advantage of genetically modified crops is obvious. With reference to the experience of promoting GM crops in the United States, Brazil and Argentina, if commercial cultivation is started in 2024, the bank is optimistic / neutral / pessimistic that the GM penetration rate will reach 80%, 65% and 50% respectively by 2028. In 2022, the planting area of soybean in China will be 10.24 million hectares, an increase of 1.83 million hectares, and the planting area of corn will be 43.07 million hectares. Under the background of the policy of expanding soybean and stabilizing corn, the planting area of soybean in China will continue to increase. Assuming that the planting area of corn in China remains unchanged, the planting area of soybean will increase by 1 million hectares per year. Due to the small difference between GM soybeans and corn glyphosate, based on 1165 grams of glyphosate per hectare of GM soybeans in Brazil in 2020, the bank optimistically estimates that by 2028, commercial cultivation of GM will bring an increase of 53000 tons of glyphosate demand.
The price of glyphosate is close to the historical bottom, pay attention to the warming of overseas replenishment demand.
Since the second half of 2022, overseas has entered the destocking cycle, and the price of glyphosate has entered a downward cycle, falling as low as 24500 yuan / ton at the beginning of June 2023, close to an all-time low. From mid-June to the end of July 2023, the start of overseas demand led to a significant decline in the overall inventory of the industry, mainstream production enterprises began to cherish sales, coupled with rising costs, downstream preparation enterprises and traders took goods from the bottom, and glyphosate prices bottomed out and rebounded. At the end of July, the highest quotation is 40,000 yuan / ton. Under the influence of rising prices, enterprises began to stop overhauling or reducing their negativity, the operating rate of the industry rebounded rapidly, and the market once again showed a situation of oversupply. After a brief rise, prices entered the downward channel again, falling to 293 million yuan / ton on September 8. After that, prices stabilized. As of October 20, 2023, the market price of glyphosate was 29300 yuan / ton, up 300 yuan / ton from last week. On the supply side, the operating rate of the industry in September 2023 was 75.85%, rising to the highest level in nearly a year. Affected by the increase in supply, inventories rebounded again, and factory inventories stabilized to a high of 68500 tons as of October 20. In the future, the fourth quarter is the peak season of traditional glyphosate demand, and then continue to go overseas to the end of the replenishment, glyphosate prices are expected to boost and pick up.
Risk Tips:GM commercialization progress is not as expected risk; raw material price fluctuation risk; product price fluctuation; device force majeure risk.