The spread of pandemic panic into the agricultural herbicide market is unfairly blaming China's coronavirus outbreak for supply shortages, but that's not really the case, says Nutrien Ag Solutions,managing director, Rob Clayton.
Dwindling supplies of glyphosate in Australia had relatively little to do with the disease disruption issues in the Chinese supply chain and a lot more to do with the fact rain has finally arrived in many drought-parched areas of the cropping belt.
In fact, despite some extended shutdowns after luna new year holidays, Chinese factories supplying the broad spectrum chemical had been returning to production in recent weeks.
After three years of low demand, Australian inventory levels had been significantly reduced
- Rob Clayton, Nutrien Ag Solutions
"In the first two weeks of February we sold 6 million litres of glyphosate after rain started falling in eastern Australia," Mr Clayton said.
"That compares with just 2.5m litres in all February and March of 2018, and 2.4m in the same two months last year.
"After three years of low demand, Australian inventory levels had been significantly reduced, reflecting the dry conditions, and the expense of carrying too much stock.
"Suddenly we've seen some seriously good rain on the east coast, in South Australia and in parts of WA."
Other chemicals low, too
Mr Clayton said, however, some other products, including pre-emergent, trifluralin, and prosulfocarb, could become harder to secure for some time because normal production cycles overseas had scaled down at this time of the year.
The current chemical market squeeze was being exacerbated by farmers, panicked by the coronavirus scare and the rundown in national inventory, wanting to secure a full season's spray needs in on hit, leaving shortages for others to deal with.
Nutrien, which has its own glyphosate formulation plant running at full throttle in Kwinana, WA, had "taken a bet on rain arriving" and was able to accommodate the huge upswing in demand with its stock on hand, for an initial spray event, at least.
"I think our business does have the stock to allow customers to complete a first pass spray event," he said.
"Normally there would be plenty of other stocks available, too, but understandably inventory levels were at very low levels in some areas."
Asian plants return to work
Meanwhile, he estimated about half the glyphosate plants which normally supplied the Australian market from Asia were up and running and fresh supplies were on the water.
Farm sector concerns have focused on factory workers overseas being unable to return to work and factories struggling with the logistics of getting product to port, or concerns about the availability of active ingredients for factories to convert into chemical.
Normally we'd expect about a two week delay on shipments arriving here, but now it's about three weeks
- Rob Clayton
"We don't see the situation resolving until at least April," said commentary from Sydney-based distributor and formulation company, Crop Smart, which supplies south eastern Australia.
Mr Clayton agreed the next few weeks would see much tighter availability across the farm supply sector.
Normal shipping lag times involved a 14 day withholding period for imported goods landing in Australia, although this period included sailing time to local ports.
Availability timelines had also been stretched with the introduction of 14 day shipping quarantine periods in China.
"Normally we'd expect about a two week delay on shipments arriving here, but now it's about three weeks," Mr Clayton said.
"We think we can keep up with demand, but right now I'd expect overall glyphosate volumes to be short for the next two or three weeks."
Feeling good about 2020
Recent good eastern Australian rain events and the real prospect of more from Queensland to Victoria and in WA this week gave him "a lot of reasons to feel good about 2020".
Nutrien, which was until late last year the two prominent farm services businesses Landmark and Ruralco, was responding to the general rain event with new financing products to help producers back on their feet after drought.
A new working capital offer would extend the company's traditional trading finance offer to cover breeding stock for a full breeding and young stock growing cycle.
"There are a lot of cash poor farmers that want to get stock onto fresh grass," Mr Clayton said.
"Some will just want to offer agistment because restocking could be a very expensive option right now.
"We have the risk management and financial packages and advice to suit whatever they want to choose".
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