Observing CAC: Capacity Cuts in the Pesticide Industry

The 19th China International Agrochemical & Crop Protection Exhibition (CAC) featured four main sections: pesticides, fertilizers, international participation, and equipment, occupying a total of seven exhibition halls. This exhibition integrates product launches, technology exchange, and trade negotiations, and is the world’s largest and most active platform for one-stop agrochemical trade, covering pesticides, fertilizers, seeds, non-agricultural chemicals, production and packaging equipment, plant protection tools, logistics, consulting, laboratories, and supporting services. It is an annual event for global agrochemical professionals.

Due to rising prices of technical-grade pesticides and international orders shifting from domestic suppliers to countries like India, the pesticide and fertilizer halls were relatively less crowded. Many international visitors came mainly to assess market conditions, with fewer actual deals closed. The pesticide industry is facing significant pressure to reduce capacity, especially for common products.

With tightening environmental regulations, treatment technologies and equipment for waste gas, wastewater, and solid waste have drawn increased attention from manufacturers. Many attendees inquired about environmental solutions. Investment opportunities lie in environmental upgrades of pesticide production facilities, especially in the area of cleaner technologies.

Because of the general harmfulness of pesticides to humans, packaging is trending towards automation. At this year’s show, unmanned packaging equipment for pesticide formulations was a hot topic. However, most current machines are upgrades of traditional systems based on experience, with poor stability, low efficiency, and limited compatibility. There is substantial market potential in pesticide packaging machinery, and intelligent manufacturing will be the direction of future development.

The international section primarily featured Chinese exporters, especially technical-grade pesticide manufacturers from Shandong and Jiangsu. Also present were many foreign companies aiming to expand into the Chinese market, mostly from India, Israel, and South Korea. Among them, the Korea Agro-Industry Technology Practicalization Foundation organized a delegation of 28 Korean companies. Their exhibits included smart agri-IoT devices, integrated water and fertilizer systems, biopesticides, fertilizers, and practical new technologies. China’s vast agricultural market is the key attraction, and these companies are eager to gain a foothold.

In summary, this year’s event was not particularly vibrant. The environmental policies and capacity cuts from last year drove excessive speculation in pesticide prices, which now remain historically high. Meanwhile, India’s growing production capacity brings unprecedented pressure to Chinese pesticide exports. Countries like South Korea and Israel, with advanced technology but small domestic markets, are actively seeking entry into China. The agrochemical industry faces heavy challenges—transformation and upgrading are urgently needed.