Summary: In addition to the global COVID-19 pandemic and geopolitical turmoil, there are various uncertainties like extreme weather destabilising the production of grains around the world and sending China's pesticide prices to high levels in 2022.

China's pesticide industry is closely related to changes in global food prices and international market demand. In late 2021–2022, various uncertainties in the global market have destabilised the production of grains around the world and sent prices of food and pesticides to high levels, such as more frequent and severe weather events and developing environmental protection regulations, in addition to the ongoing geopolitical turmoil and COVID-19 pandemic around the world.

- Extreme weathers reduce the yield of major grain crops around the globe

According to the July Drought report released by the Joint Research Centre of European Commission on 22 Aug., 2022, the extreme weather of drought is an imperative factor reducing European production of grain crops at the time and the report forecasts that the 2022 outputs of corn and soybean in Europe will be down by 16% and 15% from their respective five-year averages; in the US, American Federation of Agriculture estimates that the national crop yield in 2022 could be down by 1/3 year on year after severe droughts and record-breaking heat waves hit many parts of the country; in India, the grain-producing areas of 2.5 million ha afflicted by drought in Sept. has caused a loss of grains totaling 7–8 million tonnes, and the rice-growing area is expected to shrink by a larger margin than others; in China, the national average temperature in the autumn (Sept.–Nov.) of 2022 is estimated to be the highest since 1961—the southern provinces/regions suffered continuous rainfalls and high temperatures, while some northern regions were threatened by heavy rain affecting local grain production. The potential losses of crop yields are driving the food prices across the world and also motives farmers to purchase more agricultural supplies in growing plants. Pesticide prices are staying at high places.

- China's push for environmental protection

China is actively promoting environmental protection, which has limited the pesticide production. In 2015, China's Ministry of Agriculture introduced action plans that seek to achieve zero growth in the use of chemical fertiliser and pesticides by 2020. At the end of 2020, the government announced great achievements had been made according to the action plans. In 2021–2022, under powder rationing and greater efforts for the sake of environmental protection, some pesticide factories reduced the operating rate or suspended for production maintenance and upgrade, being likely to cause a decrease of pesticide output in 2022. In addition, since early 2022 when the price of energy products such as crude oil and petrochemical products started to spike, the prices of raw materials and/or intermediates have increased to varying degrees. All these factors from global demand to production and costs have contributed to the high price positioning of China's pesticides in 2022.

However, it is apparently that 2022 to date has seen downswing of prices of major pesticides in China. The sustainable weak domestic demand has played a crucial role in this case. In Q1–Q3 2022, prices of most of pesticides rolled back from their latest peaks seen in late 2021. In Sept.–Oct. 2022, a period traditionally with farmers stocking up agricultural supplies, most pesticide prices continued to reduce or leveled off.

• In the case of glyphosate, a typical herbicide, the ex-works price fell from USD12,227/t in Jan. to USD8,156/t in Oct., a decrease of 33%, down to the cost line. As a result, some small-scale factories were forced to suspend production operation at the end of Oct. 
• For tebuconazole technical, a fungicide, the ex-works price marked a 40.9 decrease from March to Oct.
• Imidacloprid, an insecticide, was also affected, with price down by 37.5% from Jan. to Oct.