Since the second half of 2016 after the beginning of environmental verification, the pesticide market has entered a "suspended animation" state, all kinds of pesticide products are in short supply. Price is all the way up, but the volume does not follow. This contradictory situation may be improved by the fourth quarter of this year .
Environmental protection constraints in two aspects of the pesticide industry: on the one hand the production of chaos to be suppressed. Some small production capacity companies will be eliminated because the high cost of environmental protection, and other companies which focused on environmental protection will win the a opportunity of development; On the other hand, shortage of products will cause the price raise, companies can achieve profit growth and the government can also insure the tax.
Yang Chaofei, the original chief engineer of Environmental Protection Department, interpreted supporting policies of the new "Environmental Law". He stressed that since the new "Environmental Law" introduced, the Central government has sent two Environmental protection inspection team to inspect environmental in different provinces, and got good results. Till the end of 2017, the central environmental protection inspectors will achieves full coverage,. Meanwhile, for pesticide companies, the cost of illegal sewage emissions will be greatly improved. For reach the standards, companies need to upgrade their technology, close down outdated production facilities, and improve the rules and regulations to follow a more strict environmental management.
Zhang Bo from Anhui Agricultural Information Consulting Co., Ltd. believes that the Chinese government's environmental policy will be a "magic spell" for sustainable development. It is also a effective tools to clear the poor legitimacy companies. Environmental protection policy will highly improve the concentration of agrochemical industry, more than 90% companies which sale less than 100 million yuan per year are facing survival challenge by choosing to be shut down or move to industrial parks and upgrade sewage emissions equipment And the others which has already shut down are hopeless to recover. Pesticides supply will remain tight for a long period, the industry is expected to accelerate the process of concentration and leading enterprises will further enhance the profitability.