← Critical Product/Equipment/Process: Agri, Food & Bio-based (all topics)
Destocking cycle - agrochemicals
What it is
The correction that followed pandemic-era over-ordering, when distributors and formulators built inventory against supply fears and then stopped buying while it cleared. It hit intermediates and active ingredient suppliers hardest
Chinese oversupply and price deflation extended the cycle
Impact on industries
- Order books emptied for suppliers several steps removed from the farmer, since inventory correction amplifies as it moves up the chain
- Chinese price deflation meant volumes recovered before realisations did, so revenue lagged even after the destocking ended
- It is a cycle rather than a structural break - underlying crop protection demand did not fall, only the ordering pattern
- The episode demonstrated how far upstream suppliers sit from end demand, which is the standing risk of intermediates businesses