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2024 ACE observation: Is industry at a singular point or a turning point?qrcode

Oct. 18, 2024

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Oct. 18, 2024
Erwin Xue

Erwin Xue

Vice General Manager

AgroPages

″In the 20-30 years of my career, there have never been such a downturn like today. In the past, there were market fluctuations of only certain products, but today more than 90% pesticide varieties have fallen close to or even below cost, which is a situation of negative profitability for almost all manufacturers.″ This is a comment from lots of industry players.


Among the major pesticide varieties, the price of Abamectin, Emamectin remain high which generates considerable amount of profit. Although other products are in short supply, the prices still remain low, which lead to a profit margin of less than 3%, as being experienced by a large number of technical manufacturers. In the context of the declination of food grain prices, pesticides, as an important component of agricultural production materials, may be affected earlier and more severely due to their lower weight than fertilizers and seeds.


This year, the overseas demand for formulations has increased. Hence, the domestic market demand has been relatively stable where formulators have generally received sufficient purchase orders which are being processed for urgent delivery. Meanwhile, the market appears in a decentralized manner. Due to the impacts of COVID-19, the intensification of climate change and the anti-globalization trending, all countries have become concerned about the food security, backing up the total demand for pesticides.


A number of formulation companies have achieved increase both in quantity and pricing, but their profits have continued to shrink. From large mechanical equipment, to small aluminum foil packaging, the procurement cost is put under further control. In addition, no small number of manufacturers have accelerated their process of technical-formulation integration, as shown by the lively crowds at the machinery exhibition area.


Corn futures prices 图片4.png


Soybean future price

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Wheat future price

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Source: AgroNews

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