China Securities Co.,Ltd.: Glufosinate price increases and destocking continue; core products are all expected to show good elasticity.

China Securities Co.,Ltd. released a research report stating that in September, quotes for the two "grass" herbicides (glyphosate and glufosinate) rebounded. The monthly average price of glufosinate rose 10.01% MoM, while factory inventory fell 25.17%; glyphosate rose 9.91% at month-end, while inventory still increased 8.51%. The industry continues to recover, with significant supply-demand differences among varieties. In August, pesticide formulation export value was RMB 5.324 billion, down 18.35% YoY, while the cumulative value for the first eight months still grew 7.42%. The pesticide sector as a whole remains in an upcycle, and coupled with a rise in the central grain price driven by El Nio, core pesticide varieties such as glufosinate and glyphosate are all expected to show good elasticity in the future. China Securities Co.,Ltd.'s main views are as follows: The pesticide industry has entered a gradual recovery phase Pesticides are rigid-demand products that safeguard food security. The demand for pest control, weed control, and disease prevention in agricultural production supports the long-term demand of the pesticide industry, while short-term procurement is affected by crop returns, channel inventory, and supply adjustments. In 2025H2 and 2026H1, pesticide formulation export value on a comparable basis was RMB 34.671 billion and RMB 37.384 billion, up 12.57% and 14.39% YoY respectively; export volume was 1.6244 million tons and 1.8771 million tons, up 13.71% and 15.66% YoY respectively. Prices of the two "grass" herbicides rebounded in September, with glufosinate showing a prominent increase Glyphosate and glufosinate, with their broad-spectrum weed control and low-toxicity, high-efficiency characteristics, occupy a large weight in the herbicide market. The average price of glufosinate in September was RMB 54,120/ton, up 10.01% MoM and up 21.63% YoY; the average monthly price of glyphosate was RMB 25,760/ton, up 0.78% MoM and down 5.84% YoY. At month-end, their quotes were up 20.20% and 9.91% respectively from end-August, with the price increases mainly occurring in the latter part of the month. Among the 219 product price indicators we track, 28 recorded MoM increases in monthly average prices, 88 declined, and 103 remained flat, indicating that price recovery remains differentiated. Glufosinate destocking and price increases are synchronized, while glyphosate inventory still needs to be digested According to Baiinfo data, as of September 25, glufosinate factory inventory was 1,070 tons, down 25.17% from August 28, while the observed average weekly output in September remained at 2,490 tons; glyphosate inventory was 73,950 tons, up 8.51%, while average weekly output fell 4.33%. The change in glufosinate inventory provides a relatively clear signal of supply-demand improvement. Export value fell in August, while cumulative growth was still supported by herbicides In August, pesticide formulation export value was RMB 5.324 billion, down 18.35% YoY and down 14.46% MoM; the average export price was RMB 22.36/kg, up 3.35% YoY and down 4.29% MoM. Herbicide export value decreased by RMB 639 million YoY, accounting for 53.41% of the total decrease. Cumulative export value from January to August was RMB 48.931 billion, up 7.42% YoY, of which herbicide value grew 12.39%. Investment recommendation The pesticide industry as a whole is in a prosperity recovery cycle, and industry supply-demand and profitability are expected to continue improving. Focus on the herbicide sector, especially glufosinate and glyphosate, which may be better elasticity categories. Related companies include pesticide technical material blue-chip Jiangsu Yangnong Chemical, pesticide branded formulation export blue-chip SHANDONG WEIFANG RAINBOW CHEMICAL CO.,LTD, glyphosate elasticity play Nantong Jiangshan Agrochemical & Chemicals, carbamate insecticide leader Hunan Haili Chemical Industry, phosgene-based pesticide leader Anhui Guangxin Agrochemical, and plant growth regulator elasticity leader Sichuan Guoguang Agrochemical, among others.