Experts call for pesticide export policies to be tilted towards formulations

[Introduction · China Pesticide and Fertilizer Network] It was learned at the Fourth Council of the Ninth China Pesticide Industry Association that the poor export tax rebate of technical materials and preparations has affected the enthusiasm of pesticide companies to extend to the high-end industrial chain. After the original drug of the same price, it is reprocessed into preparations and sold back to China to compete with Chinese preparation companies. As a result, on the one hand, the competition in the domestic market has been intensified, and on the other hand, the profit margins of domestic preparation companies have been squeezed.
  
At the fourth meeting of the ninth session of the China Pesticide Industry Association held in Yunnan on May 29, it was learned that the poor export tax rebate of technical and preparations has affected the enthusiasm of pesticide enterprises to extend to the high-end industrial chain. Export preparations with low environmental impact and high added value are inclined.
  
At the beginning of this year, China adjusted the pesticide export tax rebate policy. Among them, the export tax rebate for 481 pesticide technical varieties was raised to 13%, while the export tax rebate rate for preparations was still 5%.
  
Statistics provided by the General Administration of Customs show that in the first quarter of this year, China imported a total of 28,000 tons of pesticides, a year-on-year increase of 4.6%; the import value was 250 million US dollars, a year-on-year decrease of 11.9%. In the first quarter, a total of 331,000 tons of pesticides were exported, a year-on-year increase of 4.1%; the export value was 1.03 billion US dollars, a year-on-year decrease of 6.4%. The cumulative total import and export trade in the first quarter was US$1.27 billion, down 3.3% year-on-year; the trade surplus was US$780 million, down 11% year-on-year.
  
Chairman Sun Shubao of China Pesticide Industry Association said that the original pesticide is the primary product of pesticide production, and the production process will cause certain environmental pollution, while the production of preparations is relatively simple, has little impact on the environment, and has a much higher added value than the original drug. The export tax rebate rate for pharmaceuticals is usually 9%, and the export tax rebate rate for preparations is only 5%. The poor export tax rebate of technical medicines and preparations affects the enthusiasm of production enterprises to extend to the high-end industrial chain, which is contrary to the policy of encouraging the development of pesticide enterprises. However, what is surprising is that on December 31 last year, the Ministry of Finance issued the "Notice on Adjusting the Export Tax Rebate Rate for Some Products", which increased the export tax rebate rate for 481 pesticide technical substances from 9% to 13%, which can be moderately offset. The negative impact of the internal and external environment on China's pesticide exports has improved the cost-effectiveness of China's export products to a certain extent, but at the same time has widened the tax rebate gap between technical and pharmaceutical preparations.
  
China's export of pesticide formulations has grown rapidly in recent years, but in general, the export of technical medicines still plays a leading role. In 2013, the export value of domestic pesticides was 8.52 billion US dollars, of which the export value of technical drugs accounted for 60%, and the preparations accounted for 40%. The situation in 2014 was much the same. The large-scale export of technical materials has made domestic enterprises mainly play the role of "suppliers" in the international pesticide trade chain, positioned in the manufacturing sector with the lowest value, providing high-quality and cheap raw materials for the development of foreign enterprises.
  
In addition, the export tax rebate of 13% of the original drug makes overseas buyers use this as an excuse to lower the price, resulting in the price of the original drug purchased by foreign companies is lower than that of domestic companies. The processed preparations are sold back to China and compete with Chinese preparation companies. As a result, the competition in the domestic market is intensified on the one hand, and the profit space of domestic preparation companies is squeezed on the other hand.