With a crop area of more than 150 million hectares, a booming economy, and a young, growing population, China has captured the interest of agribusiness suppliers around the world over the last ten years. Concurrently, a number of sociopolitical, natural resource, and market-related drivers have affected China’s economy and will continue to influence the dynamics of the agribusiness climate in China. A new market study proposed by Kline & Company will analyze these issues.

“Global crop protection players have really focused on China in the last decade,” says Dennis Fugate, industry manager of the Specialty Pesticides practice for Kline’s research division. “Now suppliers need take a closer look because that investment is rapidly taking root in a changing business and cultural environment.”

The Chinese government has also had a hand in stoking the market by encouraging a move away from some highly toxic chemicals used in crop protection. In 2002, 75% of China’s pesticide production consisted of outdated chemicals, a number the government wants to cut to 50% by the end of 2005.

“This policy shift will enable newer products to enter the market, which will encourage competition and potential growth for suppliers that are already invested in China, as well as those looking to test the waters,” Fugate says.

Preliminary data collected for Kline’s proposed study, THE BUSINESS LANDSCAPE FOR CROP PROTECTION SUPPLIERS IN CHINA: 2005 AND BEYOND, peg the value of China’s crop protection market at $1.5 billion. While the size of the market in China is large, the amount of the country’s arable land has actually declined by nearly one-fifth in the last 50 years. In spite of that reduction, in 2003 agriculture still comprised 14.5% of its $6 trillion GDP.

The staggering expansion in China has been partly stimulated by the U.S., which granted permanent, normal trade relations to China in 2000. As a result, U.S. imports from China doubled from 2001 to 2004, helping to increase the population’s standard of living.

“The impact of China’s economic boom on agribusiness is huge, especially considering the strain on resources from all sectors,” says Mancer Cyr, senior associate for Kline’s Specialty Pesticides consulting practice. “It is reasonable to expect that issues like government support, fuel, and labor availability will combine to affect the agricultural sector’s ability to meet the demand for an increase in food quantity and quality. If that happens, the return on investment of input suppliers in China will be affected.”

THE BUSINESS LANDSCAPE FOR CROP PROTECTION SUPPLIERS IN CHINA: 2005 AND BEYOND will construct a snapshot of crop protection in China, including the structure of the industry, demographic issues, social issues, resource availability, and profiles of the top agribusiness competitors. With Kline’s FutureView Scenario Forecasting Model, subscribers will be able to generate five-year and ten-year forecasts of crop protection demand according to several variables.

For more information on this study, go to www.klinegroup.com/Y587.htm.

Established in 1959, Kline & Company is a management consulting and market research firm serving clients worldwide in the life sciences, chemicals and materials, consumer products, and energy sectors. Kline has the added capability of utilizing local expertise from its Kline Asia headquarters in Shanghai. For more than two decades, Kline’s resources on the ground in Asia have completed numerous customized consulting projects and syndicated reports on various industry sectors in China and other Asian countries.