Demand decline prices have steadily increased --- next year's Suzhou agricultural capital market forecast
In 2006, the agricultural product market in Suzhou is expected to show a general trend of declining demand, coexisting resources, and a steady increase in prices. This reflects a complex interplay between supply, demand, and production factors.
Fertilizer resources are becoming increasingly tight. With the continuous reduction in arable land and changes in rural farming structures, the total chemical fertilizer demand in Suzhou is projected to decrease by approximately 8% compared to the same period last year. However, rising costs of coal, electricity, and oil have led to higher production expenses, causing fertilizer prices to stabilize with an upward trend. In the fourth quarter, urea manufacturers attempted to lower prices to accelerate cash flow, which was unusual given the rising raw material costs. As a result, urea prices are expected to continue rising in 2006, with limited availability. Meanwhile, the demand for ammonium bicarbonate is anticipated to drop by about 7% due to structural adjustments in planting and increased use of compound fertilizers. However, many manufacturers had previously shut down or converted their production, leading to a significant reduction in current market supplies. Although Suzhou faced shortages in 2005, it's expected that the supply and demand for ammonium bicarbonate will remain relatively balanced in 2006.
With the advancement of scientific farming techniques, compound fertilizers are gaining popularity among farmers. Sales of compound fertilizers are expected to rise by around 15% in 2006. At the same time, the amount of phosphorus fertilizer used by farmers has decreased significantly by about 30%, as more economic crops are cultivated. Due to the expansion of these crops and the severe potassium deficiency in local farmland soil, the demand for potassium fertilizer is expected to increase by approximately 20%. Fortunately, the market should be able to meet this demand without major issues.
The pesticide market is also experiencing a balance between supply and demand. Over the past few years, rapid development in pesticide production led to oversupply and intense competition. To address these challenges, many companies have restructured their products, shifting toward more effective and environmentally friendly options. As a result, the market is expected to remain stable in 2006, with pesticide prices generally remaining unchanged. Demand for high-concentration, low-use, and low-toxicity pesticides is expected to grow by about 20%, while traditional, outdated pesticides see a sharp decline. Additionally, sales of biological pesticides have seen some growth, although they still account for only about 5% of total pesticide sales.
The agricultural film market is showing signs of improvement. With continued adjustments in Suzhou’s planting structure in 2006, the area under economic crops has expanded, and most of these crops require the use of agricultural films. This has led to a demand increase of approximately 6%. However, the rising cost of plastic raw materials has pushed up the price of plastic films by about 8%. The agricultural film market is moving toward greater diversity and versatility.
Medical supplies, particularly agricultural equipment such as sprayers, are in short supply. While the demand for these tools has gradually declined due to increased mechanization, they remain essential for pest control. It is predicted that the overall market supply will meet the needs in 2006, but spare parts are scarce, and maintenance remains challenging.
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