Most businesses experience periods of highs and lows. The key is determining whether these lows are part of a recurring cycle or the result of a one-time event. The agrochemical sector is currently in a downturn due to specific, isolated incidents. This includes a sudden rise in industry inventory and an oversupply that entered the market following the resumption of Chinese production after COVID-19 restrictions. Consequently, despite performing exceptionally well during the early stages of the bull run that began at the time of the breakout of COVID, the sector has been underperforming recently. The second question is, is this downturn an opportunity for long term investors or not. Given the way things are changing, whether it is China plus plus one or for that matter policy focus on manufacturing there are good reasons to believe that some of the agro chemical companies will do well as they do two things, expand their product portfolio and also backward integration.
