Agrochemical production remains stable in 7M FY2026 supported by domestic offtake as exports moderate by about 9% YoY. While performance has remained healthy in H1 FY2026, with excess rainfall causing flooding and crop losses, sales returns are likely to be higher thereby impacting profitability in H2 FY2026.

Channel inventory for the US chemical markets have moderated significantly with the industry undertaking significant destocking during FY2024, which continued in FY2025 and H1 FY2026 as well. This aided improvement in export volumes for Indian chemical players. 

China continues to lead global chemical production with a 9.5% YoY growth in CY2024. Chemical production in US witnessed a 0.40% YoY growth in CY2024 while EU saw contraction in chemical production in CY2024.

Exhibit: Growth in global chemical production (CY2024)

Source: Industry, ICRA Research