Top Three Tips: Sunjoy Agro Gives China Sourcing Insights for 2025
18 July 2024 From 2021 to 2022, the Chinese pesticide market experienced substantial growth driven by various factors, including the impact of the COVID-19 pandemic and the Russia-Ukraine conflict. This period is best characterized by three keywords: industry booming, soaring demand, and capacity augmentation.
In contrast, the descending market condition in 2023 gave rise to a different narrative, marked by price collapse, shrinking demand, and overcapacity.
Subsequently, in 2024, with internal and external pressure, the market trend shifted toward de-stocking, capacity reduction, and price uncertainty.
Despite the prevailing market uncertainties, China continues its status as the worldās leading manufacturing hub for active ingredients. With adjustments in stock consumption and production capacity over the past two years, it is anticipated that prices will eventually return to rationality, and China will continue to deliver products to global clients. Here are three tips to consider when sourcing from China in 2025.
1. In addition to purchasing common products, clients are recommended to increase their investment in innovative products.
The equilibrium of supply and demand is disrupted, leading to an overall decline in the prices of common agrochemicals since the end of 2022. These price fluctuations on the supply side will cause end-market prices to be uncompetitive, consequently resulting in diminished profitability.
Clients should prioritize innovation, employ differentiation strategies, and broaden their product spectrum. While a particular product may currently perform effectively, the emergence of resistance could occur within a few years, rendering present best-selling products ineffective in the future. Clients are advised to understand the true needs and requirements of growers and introduce novel formulations tailored to the local area. This can be achieved through the adjustment of active ingredient combinations, content percentages, and formulation types to better align with the needs of local growers.
2. Clients are recommended to seek out reliable partners with the capability to engage in marketing, research, registration, and production.
Dongsheng He, President of Ningbo Sunjoy Agroscience Co., Ltd.
As mentioned in tip number one, continuously launching innovative products is the companyās core competitiveness. This can be realized by forging mutually beneficial relationships with Chinese suppliers. Initially, a marketing team with industry acumen can help identify the true needs and market opportunities. Then, a reliable supplier, who maintains their own research facilities, can customize formulations to cater the specific requirements of growers from different regions and for a variety of crops.
Additionally, the legal distribution of pesticides is inseparable from product registration, therefore, it is important that the suppliers have the ability to support clients to obtain registrations in a timely manner. Furthermore, suppliers need to conduct production trials in their manufacturing facilities to ensure the development of products with optimal efficacy. Hence, it is crucial to collaborate with suppliers proficient in marketing, research, registration, and production.
Finding reliable suppliers in China is crucial for a successful sourcing experience. Clients should conduct a thorough background check on potential suppliers, assessing factors such as their industry experience, reputation, financial stability, and history of delivering high quality products. Additionally, clients should actively participate in industry exhibitions, such as the upcoming Agribusiness Global Trade Summit in Florida, where they can engage directly with the company representatives to evaluate the competitiveness of the offerings. When feasible, visiting the supplierās manufacturing base to assess their production strength and conduction of quality inspections is also recommended. In our opinion, suppliers with strong capabilities are better equipped to navigate through market fluctuations, minimize the risk of order cancellation, and establish long-term partnerships.
3. To enhance operational efficiency and minimize market risks, it is imperative to strengthen the communication between clients and suppliers.
As an integral part of the social economy, the pesticide market is inevitably impacted by the economic cycle. Fortunately, the Chinese pesticide market is gradually reverting to its normal state, yet price variations persist as a constant. In addition, market uncertainties are compounded by the instability of sea transportation and volatile freight costs. Given that clients are geographically distant, they may not have as clear understanding of the market changes as their Chinese suppliers, who are actively engaged in the industry. To mitigate these challenges, it is recommended that clients foster deeper collaboration and maintain close communication with suppliers, seek expert insights, find a balance between projected lower prices and seasonal procurement plans, make judicious purchase orders, supervise suppliers to ensure timely production and manage shipments accordingly.
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