On August 12, 2021, the General Office of the National Development and Reform Commission issued a notice entitled "Barometer of Completion of Double Control Targets of Energy Consumption in Different Regions in the First Half of 2021".
According to the notice, in terms of total energy consumption control, Qinghai, Ningxia, Jiangsu, Hubei and other eight provinces (regions) are the first-level warnings; Zhejiang, Sichuan and other five provinces (regions) are second-level warnings; Seventeen provinces (regions), including Henan, Gansu, Shandong and Liaoning, are the third-level warnings. The inform pointed out that all localities should resolutely implement the decision-making arrangements of the CPC Central Committee and the State Council, keep a high degree of vigilance against the severe energy-saving situation in the first half of the year, and take effective measures to ensure the completion of the goal of double control of energy consumption throughout the year, especially the goal and task of reducing energy intensity.
The nationwide "double control of energy consumption" is not limited to Jiangsu, Shandong and other traditional agricultural production provinces, and even the northeast region has begun to restrict some residents' electricity consumption in order to ensure that winter heating is not affected. Electricity restriction and production restriction have led to a reduction in production at the supply side, and the market situation of raw materials and intermediates is "tight in goods and high in prices". The shortage of raw materials supply has led to a wider production suspension and restriction in the agro-chemical industry. At present, the dominant market in China is still the relationship between supply and demand, and the fear of limited production and shortage of goods has triggered a rush to buy.
On October 3rd, 2021, the price index of Sino-Agri Group was reported to be 180.58 points, a sharp increase of 34% from last month, and the price indexes of herbicides, insecticides and fungicides all exceeded 30%. Compared with last month, 90% of the tracked hundreds of products rose, and the price index of Sino-Agri Group reached a record high, both in terms of increase range and index. China's agricultural market is experiencing the craziest price increase in recent ten years.
According to the market research results of Sino-Agri Group, most pesticide manufacturers failed to lock in upstream raw materials in time, which made it impossible to evalsuate the impact of the subsequent "double control of energy consumption". "No quotation, no order" may become one of the hottest keywords in the agrochemical industry in 2021.
According to the current market situation, the current market price signals of pesticide raw materials and intermediates may be in a distorted state.
As for the future trend of agrochemical market and the result caused by the closure of the market order, we cannot judge by the past experience. On the one hand, the necessary products should be collected and sold, mainly in stock; On the other hand, at present, it may be one of the best strategies to wait for the agrochemical market to stabilize and then we intervene in the market.