Agricultural chemicals are important agricultural inputs for ensuring food security and agricultural development. However, in the first half of 2023, due to weak global economic growth, inflation and other reasons, external demand was insufficient, consumption power was weak, and the external environment was even worse than expected. The industry’s overcapacity was evident, competition intensified, and product prices fell to the lowest point in the same period in recent years.
Although the industry is currently in a temporary cycle of supply and demand fluctuations, the bottom line of food security cannot be shaken, and the rigid demand for pesticides will not change. The future agricultural and chemical industry will still have stable development space. It can be expected that under the support and guidance of the policy, pesticide enterprises will further focus on optimizing the industrial layout, improving the product structure, increasing efforts to layout efficient and low toxic green pesticides, improving the progressiveness of technology, promoting cleaner production, improving their competitiveness while actively addressing challenges, and achieving faster and better development.
The agrochemical market, like other markets, is influenced by macroeconomic factors, but its impact is limited due to the weak cyclical nature of agriculture. In 2022, due to external complex factors, the supply and demand relationship in the pesticide market has become tense during the stage. Downstream customers have adjusted their inventory standards due to concerns about food security and have purchased in excess; In the first half of 2023, the inventory of international market channels was high, and customers were mostly in the stage of destocking, indicating a cautious purchasing intention; The domestic market has gradually released production capacity, and the supply and demand relationship in the pesticide market is becoming increasingly loose. Market competition is fierce, and products lack long-term price support. Most product prices continue to decline, and the overall market prosperity has declined.
In the context of fluctuating supply and demand relationships, fierce market competition, and lower product prices, the operating data of major agricultural chemical listed companies in the first half of 2023 was not entirely optimistic. Based on the disclosed semi-annual reports, most enterprises were affected by insufficient external demand and a decrease in product prices, resulting in varying degrees of year-on-year decline in operating revenue and net profit, and performance was affected to some extent. Faced with unfavorable market conditions, how pesticide enterprises face pressure, actively adjust strategies, and ensure their own production and operation has become the focus of market attention.
Although the agricultural chemical industry market is currently in a disadvantageous environment, timely adjustments and active responses by enterprises in the agricultural chemical industry can still give us confidence in the agricultural chemical industry and major enterprises in the market. From the perspective of long-term development, with the continuous growth of population, the importance of global food security cannot be shaken. The demand for pesticides as agricultural materials to protect crop growth and ensure food security has remained stable for a long time. In addition, the agricultural chemical industry’s own optimization and adjustment of pesticide variety structure still has a certain degree of growth potential in the future agricultural chemical market.
Post time: Sep-07-2023