According to the Zhitong Finance APP, Kaiyuan Securities released a research report stating that in the short term, the prolonged downturn in the pesticide industry has led companies to potentially reduce expenses related to safety and maintenance, which poses hidden dangers for safe production. Since 2025, there have been continuous supply disruptions for products such as Acetochlor, Chlorpyrifos, and Chlorantraniliprole. As global market distribution channels actively digest inventory, coupled with good demand in the export market, some pesticide products such as Glyphosate, (Technical) Glufosinate, Lambda-cyhalothrin, Carbendazim, Thiophanate-methyl, Avermectin, and Methomyl are expected to see a phase of rebound in essential demand, which may help restore profitability for industry companies. In the medium to long term, the pesticide industry's &#34;Rectification and Regulation&#34; three-year action plan is expected to effectively curb the inward competition within the industry and may assist in reversing the downturn.
<h2>The main viewpoints of Kaiyuan Securities are as follows:</h2>
Event: The pesticide industry launches a &#34;Rectification and Regulation&#34; three-year action plan, which may help reverse the downturn through industry self-discipline.
According to the official account of the China Pesticide Industry Association, the association has issued a notice regarding the launch of the &#34;Rectification and Regulation&#34; action in the pesticide industry. Based on the requirements of the 2024 Central Economic Work Conference regarding &#34;comprehensive rectification of inward competition,&#34; it has been decided to carry out a three-year action plan across the industry to address prominent issues such as hidden additives, illegal production, and disorderly competition currently existing in the pesticide industry.
Key tasks include: (1) Strictly prohibiting the addition of hidden ingredients or unregistered active ingredients in products or selling them under the guise of additives; (2) Severely cracking down on illegal production activities; (3) Strictly prohibiting the sale or procurement of illegally processed formulations; (4) Resisting low-price disorderly competition by enterprises: (1) Strengthening self-discipline awareness, prohibiting dumping at prices below cost, and disrupting normal production and operation order. (2) Encouraging enterprises to innovate to improve product quality, brand service, and enhance market competitiveness. (3) For key products with severe inward competition, formulating industry competition norms to curb vicious competition among enterprises.
Kaiyuan Securities believes that through the implementation of the &#34;Rectification and Regulation&#34; action, by the end of 2027: market order will be significantly improved, inward competition in the industry will be effectively curbed, product quality will be significantly enhanced, illegal production activities will be fundamentally restrained, and enterprises' awareness of compliance will be significantly strengthened.
Pesticide Industry: Global agricultural chemical destocking + good export demand, some pesticides see both volume and price rise, aiding profitability recovery.
Since Q4 2022, the global pesticide market has entered a destocking cycle, with domestic large-scale production capacity being released, leading to a mismatch between supply and demand that has caused the prices of most pesticide products to fluctuate downward from their peaks in 2021. As of July 27, the China Agricultural Chemical Raw Material Price Index reported 75.35 points, down 0.44% year-on-year and up 0.33% month-on-month; among the hundreds of tracked products, 63% saw a year-on-year decline; 57% remained stable month-on-month, and 3% increased.
According to data from the General Administration of Customs, from January to June 2025, the export quantities of herbicides, insecticides, and fungicides from China were 1.229 million, 261,000, and 132,000 tons, respectively, with year-on-year increases of +14%, +32%, and +24%; the main export destinations include Brazil, the United States, Thailand, Australia, Nigeria, and Ghana. Due to the differences in the start times of spring plowing in the Northern and Southern Hemispheres, the usage of formulations is high during the spring plowing season, and formulation companies need to procure raw materials in advance. Generally, the peak season for domestic pesticide exports to the United States is from the end of the year to April of the following year, while June to August is the peak season for exports to South America
Kaiyuan Securities believes that in the short term, the prolonged downturn in the pesticide industry has led companies to potentially reduce expenses related to safety and maintenance, which may pose hidden dangers for safe production. Since 2025, there have been continuous supply disruptions for products such as Acetochlor, Chlorpyrifos, and Chlorantraniliprole. As global market distribution channels actively digest inventory, coupled with good demand in the export market, some pesticide products such as Glyphosate, (Technical) Glufosinate, Cypermethrin, Carbendazim, Thiophanate-methyl, Avermectin, and Methomyl are expected to see a phase of rebound in essential demand, which may help restore profitability for industry companies. In the medium to long term, the pesticide industry's &#34;Three-Year Action Plan for Rectifying Wind and Discipline&#34; is expected to effectively curb the inward competition within the industry and may assist in a turnaround in prosperity.
Investment Recommendations
Recommended targets: Yangnong Chemical (600486.SH) (leading agricultural chemical blue chip), Limin Co., Ltd. (002734.SZ) (Bacillus subtilis, etc.), Xingfa Group (600141.SH) (leading Glyphosate producer), etc.; Benefiting targets: Jiangshan Co., Ltd. (600389.SH) (elastic leader in Glyphosate), Lier Chemical (002258.SZ) (leading Glufosinate producer), Runfeng Co., Ltd. (301035.SZ) (pesticide formulations going abroad), Guangxin Co., Ltd. (603599.SH) (integrated pesticide leader), Guoguang Co., Ltd. (002749.SZ) (plant growth regulators), Xianda Co., Ltd. (603086.SH) (Acetochlor), Hebang Biotechnology (603077.SH) (leading Glufosinate producer), and Shanshui Technology (301190.SZ) (pesticide intermediates), etc.
Risk Warning
Policy implementation may fall short of expectations, pesticide demand may be lower than expected, and there are risks related to safety and environmental protection

002749

603086

603599

002734

301035

002258

KaiYuan Securities released a research report stating that the pesticide industry is launching a three-year action plan called "Zheng Feng Zhi Juan" to improve market order, curb involution competition, and enhance product quality. It is expected that by the end of 2027, the industry will effectively curb illegal production and low-price competition, and strengthen corporate compliance awareness. In the short term, the demand for some pesticide products is rebounding, which will help restore profitability. In the medium to long term, this action will assist in reversing the industry's prosperity

Zhitong

GGAC

Cynda

ANHUI GUANGXIN AGROCHEMICAL

LMGF

RAINBOW CHEMICAL

LIER CHEMICAL

Open Source Securities: The pesticide industry launches a three-year action plan for "Rectifying Wind and Managing Volume," optimistic about supply optimization aiding profit recovery and economic reversal