For the pesticide industry, in the past year, opportunities and threats coexisted, and there were mixed feelings. In 2006, the total output of pesticides in China continued to rise. By September 2006, the total output of pesticides reached 975,300 tons (calculated by active ingredients), up 24.3% year-on-year. Among them, pesticides increased by 17.9%, fungicides increased by 13.9% and herbicides increased by 30.7%. The rapid development of pesticide industry in China has given countless enterprises the opportunity to rise rapidly. At the same time, the complicated and changeable market environment also made many pesticide brands encounter many setbacks and difficulties in 2006. Raw materials, energy, human resources, terminal promotion, advertising costs have risen, pesticide prices have continued to fall, and the profit level of the pesticide industry has dropped significantly. Overcapacity, serious variety homogeneity, insufficient brand building, serious talent flow, marketing dilemma, vicious price war, internal strength ... With the rapid change of business environment, many existing and potential problems follow like Pandora's box. First, the review of pesticide market in 2006 is that the market has not changed much. The brand structure of "local dominance and foreign subordination" remains the same. Secondly, the overall price has declined steadily. Overall, the prices of conventional varieties are basically the same as last year, and the prices of some products have increased. In terms of varieties, the price of pesticides increased, especially during the outbreak of rice planthoppers, and some pesticide varieties used to control rice planthoppers increased greatly, such as imidacloprid, dichlorvos and chlorpyrifos. The prices of herbicides and fungicides have fallen. The price of imported pesticides is stable, with a fluctuation range of about 1%. From the perspective of crops, pesticide products related to oil crops have declined, while pesticide products related to rice have slightly increased. In 2006, the price basically followed the trend of the previous three years, but it still fell relatively quickly. The profitability of pesticide enterprises is generally insufficient, which determines the limited investment ability. Moreover, the local industrial chain is incomplete and the lack of core technology has hardly changed. In 2006, there was a new trend in China pesticide industry. Almost all local pesticide enterprises began to pay attention to industrial design, trying to seek a breakthrough in market space through industrial design, and achieved certain results. In addition, the occurrence of rice leaf roller is serious and it is difficult to control it. Regent, dichlorvos, chlorpyrifos. At the same time, the use of pesticides in vegetables has been increasing continuously. Due to the severe drought and typhoon in southern China, the occurrence area of Plutella xylostella and vegetable pests in the south is small, and the use of non-selective herbicides has also been affected. The occurrence of wheat pests is light, and the sales of aphid control drugs are reduced. With regard to cotton, the increase in international cotton prices has stimulated farmers to use more pesticides, but cotton bollworm and beet armyworm have slightly occurred, and their dosage has decreased. The risk of using herbicides before corn germination is further increased. The dosage of acaricide is reduced. The dosage of bactericide is also greatly reduced. Herbicide stem and leaf treatment agent is becoming popular. The cultivation of characteristic crops has driven the local pesticide market, such as herbicides in garlic fields, corn borer in ginger fields, blind stinkbug in winter jujube and control of leaf spot. Apples and pears in orchards in northern China suffered from low temperature during flowering, which led to a decrease in the use of pesticides in orchards. The production and sales of five highly toxic pesticides, such as methyl parathion, dropped sharply. To sum up, in 2006, China's pesticide industry basically changed steadily, but there was little change. So, what will be the trends and characteristics of pesticides in China in 2007? 2. Analysis of the competitive environment of pesticide enterprises. The embarrassing dilemma of "increasing income and reducing profits" in the internal competitive environment of pesticide enterprises is a concentrated reflection of the intensification of many deep-seated contradictions in the pesticide industry for some time. The first is low-level redundant construction, leading to excessive vicious competition in the industry. Generally speaking, China's pesticide industry is characterized by many enterprises, small scale, high cost and low efficiency. Many enterprises will inevitably have repeated construction such as product duplication and production line duplication. The reality is that as few as six or seven products, as many as dozens and as many as hundreds of products are produced at the same time, and the market competition is extremely cruel. Facing the reality of low technology content, lagging service and great quality difference of pesticide products, price competition has become the main means of competition for most pharmaceutical enterprises. Second, there is a serious overcapacity, and the insufficient operating rate has become a common phenomenon in the pesticide industry, which directly leads to a sharp increase in production costs. Third, the price of pesticides continues to fall, while the prices of energy and raw materials continue to rise, and the cost of product promotion rises, which makes the cost stay high and the input-output ratio deteriorate sharply. Fourth, the research and development links are mostly imitation pesticides, and the product positioning is inaccurate, which intensifies the disorderly competition in the industry. Sales units guide the market, blindly promote sales, and consumers lack the ability to distinguish. 2. Policy background of external living environment of pesticide enterprises: The external pressure faced by pesticide enterprises first comes from policy factors, and the continuous price reduction makes the profit space of pesticide enterprises in a weak position in the industrial chain smaller and smaller. Policy supervision is getting stricter and stricter, but the advertising promotion expenses are rising year by year, and the items of product promotion expenses are endless, which makes all pesticide enterprises miserable. Channel environment: In order to expand the living space, dealers have launched their own brand products, which are not standardized and compete with the majority of pesticide enterprises for market share. Pesticide enterprises without sales terminals and product advantages will be squeezed out of the sales terminals. 3. Analysis of survival factors of pesticide enterprises After the baptism of market competition, the survival foundation of pesticide enterprises has become increasingly clear: products, marketing networks and brands are the three major factors for pesticide enterprises to win the market. Among them, products are the basis for the survival and development of pesticide enterprises, and product advantages are the core competitiveness of pesticide enterprises. Without products, marketing networks and brands are passive water, without roots. Without the network, you can open and occupy the market through advertisements and agents; Without brand, good products can still enter thousands of households through powerful sales means and smooth sales network, and accumulate wealth silently. 3. Prospect of Market Opportunities in 2007 Favorable factors affecting pesticide enterprises: In 2006, the agricultural tax was abolished in various provinces, the average income of rural residents continued to grow, and the demand for pesticides gradually increased, which will encourage farmers to invest more in crops and buy more pesticides. 1. product trend: products are the survival foundation of the pesticide industry, and the serious lack of research and development capacity of new pesticides in the whole industry is the bottleneck restricting the development of pesticide enterprises. Imitation of pesticides with expired patents has always been a great business opportunity in the field of pesticides at home and abroad. Whoever has accurate market information and policy information, who has foresight, can easily share other people's scientific research achievements and share a piece of action. 2. Technical trend: There is little room for future breakthrough. There will be no major technological innovation in 2007. 3. Price trend: In 2007, prices will continue to be reduced. It is predicted that the price reduction in 2007 will slow down slightly compared with previous years. 4. Trend of industrial chain: It is estimated that local pesticide enterprises will not make great achievements in the supply of upstream raw materials in 2007, mainly due to the lack of profitability and investment ability of local pesticide enterprises. 5. Service trend: At present, the problem of pesticide after-sales service is serious, and more and more enterprises have exposed the problem of "service can't keep up with sales". Therefore, improving the technical service level as soon as possible has become a top priority for all pesticide enterprises. 6. Channel trend: There are new changes in sales channels. In recent years, the distribution channels of pesticides show the coexistence of agricultural resources system, agricultural technology system and individuals. Recently, new situations have emerged: first, a chain sales network mainly organized by pesticide distribution groups; The second is the chain sales network mainly organized by pesticide production enterprises, and the third is the emergence of production enterprises entering large pesticide or agricultural supermarkets; Fourth, a new sales channel-postal distribution has emerged in some provinces. In 2007, the channel will enter a relatively stable period, and the possibility of large-scale mergers and acquisitions is small.