China cancels export tax rebates for pesticides including glufosinate

China will scrap value-added tax export rebates on a range of agrochemicals, including glufosinate and several widely used insecticides, from April 1, 2026, as Beijing steps up efforts to rein in overcapacity and cool trade frictions tied to its large export surpluses. The decision was announced on Jan. 9 in a joint statement by the Ministry of Finance and the State Taxation Administration.

The products affected include glufosinate and L-glufosinate, acephate, malathion, profenofos, ethephon, fosetyl-aluminium and trichlorfon, chemicals that are central to global crop protection programs in grains, fruit and specialty crops. The removal of the rebate will lift free-on-board export prices by about 9%, effectively passing a higher tax burden to overseas buyers.

Market participants expect a short-term rush of advance orders ahead of the April deadline as distributors and formulators seek to lock in lower prices. Chinese manufacturers with overseas storage capacity are also expected to move product into foreign warehouses before the change takes effect, a pattern that could temporarily tighten domestic availability while creating pockets of oversupply abroad later in the year.

The rebate removal applies only to technical and active-ingredient exports and does not cover formulated pesticide products, a carve-out that gives Chinese formulators a relative cost advantage in global markets. For multinational crop-protection companies and regional distributors, the rule change is likely to sharpen the gap between sourcing raw actives from China and importing finished products.

The agrochemical move comes alongside a broader recalibration of China’s export policy across energy, metals and chemicals. Beijing has already cut or eliminated rebates for photovoltaic products, battery materials, aluminum and copper in recent rounds of policy adjustments aimed at curbing deflationary price wars and easing pressure from trading partners over what they see as subsidized exports.

In the solar and battery sectors, for example, China has reduced VAT export rebates to 6% for certain battery products and set a path toward full removal by 2027, while rebates for photovoltaic components have also been pared back, according to official product lists covering hundreds of items across the supply chain. Industry groups have argued that trimming rebates should help stabilize prices and reduce the risk of anti-dumping cases abroad.

For the global agrochemical market, the pesticide rebate rollback reinforces a similar message. China, the world’s largest supplier of crop-protection actives, is signaling that it no longer intends to use tax rebates to support low-margin volume exports in sectors where capacity has outpaced demand. For farmers and distributors outside China, that shift points to structurally higher input costs and a greater need to diversify supply chains beyond a single dominant producer.