Rising Energy Costs Begin to Reshape Crop Protection Markets
13 May 2026 Rapid geopolitical shifts and surging crude oil prices are beginning to ripple through global crop protection markets, but the full pricing impact has yet to land, according to Managing Director of Pacific Agriscience C.S. Liew.
Prices out of major exporting hubs like China and India are moving upward, but those increases have not fully reached distributors or farmers. The reason is straightforward: inventory.
“Not much is happening in the market in terms of pricing … simply because of inventory,” Liew says, noting that many companies are still working through preconflict stock while delaying new purchases.
That lag, however, is unlikely to hold. As industry analyst Bob Trogele, CEO of ProAgInvest, notes, cost pressures tied to energy, logistics, and raw materials typically move through the system with delay.
“There’s a lag … but those costs will find their way through the market,” he says.
For now, the system is absorbing the shock. But that buffer is thinning — and quickly.
Oil-Linked Inputs Surge First
While pesticide prices remain relatively stable, upstream cost pressures are already breaking through.
For solvents and packaging materials — oil-derived inputs once considered stable and predictable — volatility has emerged almost overnight as a key cost driver. As a result, there is a growing push to diversify sourcing in these categories, an area Liew says had not been a major focus in the past.
“What’s driving this is, of course, the energy situation,” Trogele says. “Inputs tied directly to crude oil — particularly xylene and plastic packaging — have surged dramatically, in some cases, rising two to three times compared to prewar levels.”
However, rising energy costs are not hitting all markets equally.
Countries with stronger access to oil or reserves, such as China, Malaysia, and Indonesia, are better positioned to absorb the shock. In contrast, import-dependent markets like India, Thailand, and the Philippines are facing more immediate and acute pressure.
“I wouldn’t say anyone is really benefiting from this,” Liew says, underscoring the broad-based strain across the region.
The result is a widening divide in cost exposure, one that is beginning to reshape competitiveness across Asia.
Availability is tightening at the same time, with widespread delayed deliveries becoming increasingly common, according to Liew and Trogele.
These early signals matter. If elevated crude oil prices persist for another four to six weeks, Liew expects those cost increases to cascade into finished pesticide pricing.
A Fragmented Pricing Response
Those early warning signs are already translating into uneven pricing reactions. The market is not moving in lockstep.
Larger distributors, backed by stronger inventory positions, have largely held prices steadily. Smaller players, with less cushion, are already being forced to adjust. Others are moving more opportunistically, raising prices in anticipation of broader increases, according to Liew.
“Only the weaker players had to put their prices up,” Liew says, noting that limited inventory is forcing earlier action among smaller suppliers.
That hesitation to increase prices among larger players reflects a broader reluctance among some companies to pass on rising costs too quickly in a highly competitive and margin-sensitive market.
“Prices are already very close to production cost … they’re not making money,” Trogele says, pointing to weak margins among many manufacturers.
Yet even in China — the world’s largest producer of generic pesticides — price pressure appears to be building. A recent China Price Index by David Li, Vice President of SPM Biosciences, reports that manufacturers have started implementing selective increases, typically in the range of 5% to 20%, depending on the product.
Sourcing Strategies Turn More Disciplined
Companies are also adjusting their sourcing strategies — but with far more caution than in past cycles.
There is a clear shift toward securing supply earlier for fast-moving, high-demand products, while pulling back on speculative purchasing. For slower-moving products, many companies are now operating on a back-to-back basis — only ordering once demand is confirmed, according to Liew.
“They are not as aggressive like they were during COVID — there’s no panic buying this time,” Liew says.
After experiencing sharp price corrections in previous boom-and-bust cycles, the industry is actively avoiding the risk of over-ordering and being left with high-cost inventory, according to Liew.
Strategic Relationships Become Critical
In this more volatile and constrained environment, transactional buying is losing ground to strategic alignment.
Liew emphasizes that companies must move toward deeper partnerships, whether through joint ventures, toll manufacturing, or long-term agreements, to ensure supply continuity and competitiveness.
“If you are just coming to negotiate price, you get a different price,” he says, adding that priority increasingly goes to long-term strategic partners over spot buyers.
That shift is accelerating interest in more collaborative manufacturing models.
Liew is set to host a Global Pesticides JV and Toll Manufacturing Workshop in July, aimed at bringing together manufacturers, distributors, and emerging players to rethink how the industry structures supply relationships.
The event will serve as a platform for manufacturers, particularly from China and India, but will also include ones from Italy, Indonesia, and Taiwan, to present their capabilities, while helping buyers identify partners for tolling, joint ventures, and contract manufacturing. Program outline can be found online.
“I’m giving players a platform to come together,” Liew says, emphasizing the need to move beyond traditional buy-sell dynamics.
The audience will span companies developing new molecules, legacy players expanding outsourced production, and distributors scaling into regional or global markets.
The message is clear: Stronger partnerships will define who secures supply.
Caution Defines the Next Phase
Looking ahead, uncertainty remains high, and visibility is limited, but one thing is different this time: behavior.
Communication across the supply chain has accelerated, with companies shifting from periodic check-ins to near real-time engagement.
“It’s kind of like a war room situation,” Liew says. “They used to talk to suppliers once a month … now they’re talking every couple of days.”
Companies are also applying hard-earned lessons from past disruptions, taking a more measured and disciplined approach to sourcing and inventory, Liew says.
For companies navigating the uncertainty, adaptation will be critical.
“Not adjusting is not an option,” Trogele says, pointing to the need for tighter cost control, supply chain discipline, and new operating models.
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