Previously, to encourage pesticide exports, China implemented an export tax rebate policy for most pesticide technical materials, with rebate rates generally ranging from 9% to 13%. In 2026, the pesticide industry will see new changes. Multiple factors, including adjustments to the export tax rebate policy, domestic anti-involution efforts, and overseas restocking demand, are expected to drive a recovery in the pesticide industry’s prosperity.
On January 8, 2026, the Ministry of Finance and the State Taxation Administration jointly issued an announcement clarifying that, starting April 1, 2026, the value-added tax export tax rebate qualification for some pesticide products will be cancelled.
The categories of pesticides for which export tax rebates have been cancelled include herbicides (glufosinate, succinyl phosphonate, clethodim, dicyclohexane, etc.), insecticides (dichlorvos, trichlorfon, flubendiamide, etc.), fungicides (methyl thiophanate, chlorpyrifos, aluminum fosetyl-aluminate, fosetyl-aluminate, etc.), and plant growth regulators (ethephon), among other mainstream pesticide technical materials.
From a policy perspective, the cancellation of export tax rebates for some pesticide technical materials has both short-term and long-term effects. In the short term, the window of opportunity before the policy takes effect may trigger a rush to export. Overseas customers, considering the increased cost pressure after the policy takes effect, will accelerate inventory replenishment, which will support product price increases. In the long term, profit margins for low-end products will be further compressed, and cost pressures will force companies to shift from price competition to quality competition, with high-pollution, high-energy-consuming, and outdated production capacity expected to accelerate its exit from the market.
Meanwhile, this policy retains export tax rebates for pesticide formulations, aiming to optimize the structure of exported pesticide products and promote companies to accelerate technological innovation and product upgrades. Enterprises can shift their export focus from raw materials to high-value-added branded formulations, gaining a competitive edge in the fiercely competitive pesticide industry. Leading companies that have completed vertical integration of the industry chain and possess strong formulation production and overseas registration capabilities have significant advantages.
Currently, my country’s pesticide industry is in a bottoming-out recovery phase. According to data from World Agrochemical Network, the capacity utilization rate of most pesticide varieties in my country is low. Several major categories of pesticides, including insecticides, fungicides, herbicides, and plant growth regulators, have severely overcapacity, with capacity utilization rates of only 30%-60%. In July 2025, the industry launched an “anti-involution” campaign, with leading companies using capacity control to avoid vicious price wars and push product prices back to a reasonable range, ending a three-year downward cycle for my country’s pesticide industry. In addition, overseas pesticide formulation companies are in a restocking cycle, and global pesticide channel inventories are approaching reasonable levels. With inventory levels low, restocking demand continues. Furthermore, pesticide demand is highly seasonal. With spring planting approaching in China, February to May is the peak season for pesticide production. Formulation companies need to purchase raw materials in advance, so the peak season for raw materials precedes that of formulations, which will strongly support pesticide demand.
Relevant companies include Yangnong Chemical (a blue-chip company in the agrochemical sector with a complete product range), Runfeng Shares (a leading company with a comprehensive overseas marketing network and numerous overseas registration certificates), Lier Chemical (a leading company in glufosinate and glufosinate-ammonium), Jiangshan Shares (a leading company in glyphosate, dichlorvos, and trichlorfon), and Guoguang Shares (a leading company in plant growth regulators). However, the industry also faces certain risks, such as weak industry demand, worsening competitive landscape, weaker-than-expected policy implementation, and slower-than-expected elimination of outdated production capacity.
