Fine balance for supply & demand in 2015

April has seen really strong sales of all sowing chemicals and of knockdowns and spikes including glyphosate, oxyflurofen and carfentrazone in areas that received rain earlier in the month.

April has seen really strong sales of all sowing chemicals and of knockdowns and spikes including glyphosate, oxyflurofen and carfentrazone in areas that received rain earlier in the month. Two products are worth a special mention because they illustrate a broader market trend.

Paraquat has sold out in the wholesale market. This really didn’t take much with good rainfall in West Australia followed by early April rain in the east and everything available has been sold. It’s a sign of cautious stocking for an average season. Had there been more than average rain over a greater area and later in the season some areas would have struggled to obtain the product.

Simazine sold out four weeks ago. A multinational that would have normally underpinned the market with stock, announced to its customers it had bought in much less than was needed. This year Triazines, while critical at sowing, have been unprofitable for chemical companies so it was a rational response by one multinational not to fill their remaining orders. When one of the major players runs out of a product like this, the whole market can be sold out in a matter of days.

This season it’s clear to us, that Ag Chem manufacturers and distributors are planning conservatively and planning to run out of stock. Crop Smart has done a great job at ensuring supply of both these products to everyone that we committed to, but supply this month is going to be extremely tight.

The lessons of the last six weeks is that in the market right now, it only takes a slight change in the weather or a single decision by one market player and the balance between supply and demand is easily upset.