As the U.S.-China tariff war continues to escalate, the resilience of China’s agrochemical industry is facing a new test.

Plant protection products—commonly referred to as pesticides in China—serve as a core input for modern agriculture, safeguarding global food security by controlling pests and diseases and regulating crop growth. As the world’s largest pesticide producer, China has established a four‑stage industrial chain spanning raw materials, intermediates, active ingredients, and formulated products, which is accelerating its transition toward greater efficiency and reduced toxicity under the impetus of environmental policies.

In 2024, the release of active‑ingredient production capacity led to price volatility at the lower end, while formulated‑product exports posted counter‑trend growth. In 2025, as the U.S.–China tariff war continues to escalate, China’s pivotal role in the global supply chain and its industrial resilience will face new challenges, prompting the industry to address these complexities through technological innovation and market diversification.

01

Downstream demand for China’s pesticide intermediates is steadily rising, with a shift toward higher efficiency and lower residue levels.

Driven by growing demand for green pesticides, the share of environmentally friendly intermediates has been increasing year after year. China and India have emerged as the world’s leading producers of pesticide intermediates and active ingredients. In 2024, China’s output of chemical pesticide active ingredients (expressed in terms of 100% active substance) reached 3.675 million tons, corresponding to an intermediate consumption of approximately 7.35 million tons. Nationally, pesticide intermediates are concentrated in production clusters centered on East China, South China, and North China, with Jiangsu, Shandong, and Zhejiang accounting for over 70% of total capacity. Against the backdrop of increasingly stringent environmental regulations, the industry is accelerating consolidation and upgrading, with outdated capacity being phased out. Leading companies are enhancing supply stability through technological upgrades. Notably, the product mix is shifting toward higher efficiency and lower toxicity, with bio‑synthetic and natural‑product‑derived intermediates experiencing particularly strong growth. However, certain high‑value‑added products remain reliant on imports, underscoring the urgent need to strengthen domestic production.

02

In 2024, China’s active ingredient pesticide production capacity expanded, while prices remained volatile at low levels.

In 2024, China’s agrochemical active ingredient market exhibited a phased characteristic of “capacity release and downward price pressure.” Between 2016 and 2018, driven by stricter safety and environmental policies, intensified government oversight, and the policy goal of achieving “zero growth” in pesticide usage, agrochemical producers progressively implemented relocation and upgrading plans, leading to a profound restructuring of industry capacity. As a result, the output of chemical pesticide active ingredients declined sharply from 3.778 million tons to 2.083 million tons, a drop of 45%. Subsequently, production gradually rebounded; in 2024, with the concentrated release of relocated capacity, output surged to 3.675 million tons, up 38% year on year, and Inner Mongolia’s output climbed to third place nationwide. The East China and North China regions remain the primary production hubs, accounting for 50% and 17% of total output, respectively.

Pesticide active‑ingredient prices are fluctuating at a low level. In 2024, amid weakening demand and mounting inventory pressures, most pesticide APIs continued to trend downward. Among 93 key API products, 70 recorded price declines, accounting for 75%; 16 saw price increases, representing 17%; and 7 remained unchanged, making up 8%.

1. Herbicide

Glyphosate and glufosinate technical-grade prices are trending lower. In China, glyphosate technical‑grade prices have been fluctuating downward, while glufosinate technical‑grade prices have continued to decline, with a drop of up to 23%. Weaker demand and subdued market expectations suggest that both price trends may remain soft in the near term; however, cost‑supportive factors are likely to cap further downside.

2. Insecticide

The prices of imidacloprid and thiamethoxam technical grades continue to decline. In 2024, the price of imidacloprid technical grade first fell and then stabilized, dropping from RMB 87,300 per ton at the beginning of the year to RMB 71,200 per ton in August, before rebounding to RMB 72,300 per ton by December. Meanwhile, the price of thiamethoxam technical grade initially rose and subsequently declined, increasing from RMB 58,000 per ton in January to RMB 58,600 per ton in April, before falling to RMB 53,700 per ton by December. Affected by weak demand, both prices are expected to remain under pressure in the short term; however, cost‑supportive factors should help keep them relatively stable.

3. Fungicide

The prices of azoxystrobin and mancozeb technical grades have shown mixed trends. Azoxystrobin technical grade prices have continued to decline, falling from 154,000 yuan/ton at the beginning of the year to 139,000 yuan/ton by year-end—a 9% drop—and are expected to remain broadly stable in the near term. Meanwhile, mancozeb technical grade prices first stabilized before rising, increasing from 21,500 yuan/ton in January–May to 22,000 yuan/ton by year-end; over the next few years, growing demand could drive a steady upward trend in its price.

03

China’s demand for pesticide formulation exports continues to expand.

Driven by the policy of achieving zero growth in pesticide use, China’s consumption of end-use pesticide formulations has declined year after year. From 2015 to 2022, China implemented a dual reduction policy for both pesticides and chemical fertilizers, resulting in a steady annual decline in pesticide usage. In 2022, pesticide use totaled 235,800 tons, down 4% year on year, with herbicides accounting for 41%, insecticides 27.0%, fungicides 26%, and other product categories such as seed treatments and plant growth regulators making up the remaining 5%.

International market inventories have bottomed out and stabilized, while exports of pesticide formulations are showing positive momentum. From 2020 to 2024, China’s pesticide formulation exports have undergone adjustments, adaptations, and improvements amid fluctuating trends. Following a year-and-a-half-long global inventory‑clearing process, signs of stabilization at the bottom are emerging, with the pesticide export market demonstrating relative stability and growth potential. In 2024, China’s pesticide formulation exports totaled US$8.999 billion, up 11% year on year; the top three destination markets remained Brazil (US$1.917 billion, 21%), Australia (US$667 million, 7%), and the United States (US$525 million, 6%). Meanwhile, China’s import value in 2024 reached US$814 million, down 16.4% year on year, with Japan, Singapore, Germany, the United States, and Indonesia among the major sources. Since 2023, when the volume of formulated products exported—converted to active ingredient equivalent—first surpassed that of raw material exports, the gap between the two has widened further in 2024.

04

Impact of China–U.S. Trade

Since 2018, the United States has imposed a 25% additional tariff on 113 Chinese active ingredients for pesticides, while levying a 7.5% surcharge on another 18 such ingredients. Following Donald Trump’s return to power in 2024, he swiftly signed an executive order to further increase these tariffs. Beginning in February and March 2025, the U.S. imposed additional 10% tariffs on Chinese products; by April, the trade conflict escalated further, with additional duties of 34% and 50%, respectively. As of April 10, 2025, the combined effective tax rate on certain Chinese pesticide exports to the U.S. has reached 129% (data updated as of this date).

On the active‑ingredient side, first of all, 70% of global active‑ingredient capacity is concentrated in China. This industry structure means that the United States cannot avoid relying on Chinese supply chains when procuring agricultural chemicals. The U.S. itself lacks domestic production capacity for active ingredients, and although India holds a partial advantage in traditional categories such as phosphorus‑based compounds, it is unlikely to achieve full substitution.

Secondly, considering the volatility of active‑ingredient prices, take glyphosate as an example: its price has fallen from a peak of RMB 100,000 per ton to just over RMB 20,000 per ton. The U.S. market demonstrates strong resilience to such price fluctuations. Coupled with the U.S. agricultural sector’s substantial subsidy policies and farmers’ relatively high income levels, tariff‑induced price swings in active ingredients have only a limited impact on U.S. procurement. As for non‑bulk active ingredients, if tariffs drive the price of a particular product excessively high, U.S. firms can adjust their production processes to switch to more cost‑competitive alternatives, making industrial restructuring both feasible and practical.

On the formulation side, in 2024 China’s exports to the United States totaled only US$525 million, accounting for 6% of China’s total pesticide formulation exports. The U.S. market is not a primary destination for Chinese formulation exports, so its impact is relatively limited. The United States can supplement its supply by sourcing formulations from other countries.

Comprehensive Assessment:

1. With 70% of global active‑ingredient production capacity and a structurally advantageous supply chain, China’s API industry will continue to hold a central position as a supplier to the U.S. market in the short term. However, should tariff policies escalate further, Chinese importers are likely to accelerate the relocation of their procurement focus to regions such as India and Southeast Asia.

2. Although the current trade war remains deadlocked, the likelihood of it persisting over the long term is relatively low. China’s exporters and importers are advised to maintain a calm and watchful stance.

3. Given China’s ample pesticide production capacity and the relatively low share of U.S. imports, the imposition of reciprocal tariffs on China would have only a limited impact on domestic agriculture, with overall risks remaining manageable.

Viewpoint

China’s agrochemical industry has demonstrated strong resilience and sustained competitiveness within the global supply chain, with its competitive advantages rooted in three key pillars:

Clear policy‑driven strategic safeguards. As the “ballast” of national security, agriculture has consistently occupied a central position in policy formulation. The “14th Five-Year Plan for National Pesticide Industry Development” explicitly stipulates that by 2025, the number of pesticide manufacturers will be reduced to fewer than 1,600, while the number of retail outlets will be capped at 300,000, establishing a regulatory framework based on “supporting the strong and phasing out the weak.” In 2024, the government strengthened the pesticide registration and management system, systematically eliminating 15% of high‑toxicity production capacity, promoting industry mergers and reorganizations, and fostering healthy sectoral development. This policy orientation provides robust institutional support for the long-term, stable growth of the pesticide industry.

China has established the world’s most comprehensive pesticide industry system, fostering a fully integrated, end-to-end development model spanning intermediates, technical-grade active ingredients, and formulated products. As the largest global producer of technical-grade active ingredients, China accounts for 70% of worldwide capacity and boasts complete production capabilities, covering everything from basic chemical feedstocks to finished formulations. The significant vertical integration of the industrial chain has substantially reduced production costs. In the face of a complex international environment, this robust system has effectively strengthened supply-chain resilience, mitigated external risks, and contributed China’s expertise to ensuring global pesticide supply security.

China’s pesticide market is dominated by private enterprises, which account for over 75% of the sector, fostering a dynamic and innovative market environment. These companies leverage market‑driven operating models, demonstrating distinct advantages such as rapid decision‑making, flexible production, and precise responsiveness, enabling them to swiftly adapt to international market volatility and shifting demand. For instance, as pyrethroid products from India have increasingly entered the U.S. market in recent years—leading to a decline in exports to other regions—Chinese firms have flexibly adjusted their strategies to capture opportunities in alternative markets.

Under the guidance of the “dual circulation” strategy, private enterprises have accelerated technological upgrading and overseas product registration, while aligning with the national Belt and Road Initiative to expand into emerging markets. As a result, they have become a key driving force behind the industry’s internationalization, fully demonstrating the adaptability and innovative dynamism of China’s market mechanisms.

Source: China化Xin Consulting