According to the Ministry of Finance and State Administration of Industry and Commerce, export rebate of 21 pesticide products was revoked since August 1, 2008, dicofol and carbofuran included. This meant further intensification of export rebate policy on pesticide after the previous adjustment. On July 1, 2007, export tax rebate of pure pesticide was reduced to 5% from 13%, and that of preparation was reduced to 5% from 11%.
The government adjusted export rebate out regard for assuring domestic supply and preventing over-outflow of energy. Besides, the pesticides above are sorted as high polluting and high energy-consuming, thus the government is to curb its development by restricting its export.
BOABC believes that although export policy environment was tight, export rebate policy will be lingering for a long time, and tax rebate rate may rise when necessary. Detailed reasons are as follows:
1. Domestic pesticide output continue to increase rapidly, which will hit a record-high 2m tons in 2008. As a result, moderate export increase is needed to balance market supply. Meanwhile, price advantage of Chinese pesticide was largely weakened in Intˇl market subject to RMB appreciation and high cost, leading to less increase span of export. So tax rebate policy is unlikely to be revoked completely in the short run.
2. Processing technology and environmental protection measures of most export-oriented pesticides are much mature. Besides, chemical raw material and fuel consumption of these pesticide was very limited, for instance, annual yellow-phosphorus consumption for glyphosate production was below 0.1m tons. So increased pesticide export will not pose much pressure to environmental protection. Chinese Crop Protection Industry Association has formally requested Chinese government to resume export rebate of dicofol and carbofuran.
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