India gains market share in the chemical market
During November, I spent a week in India meeting with various suppliers of 24d, triclopyr, chlorpyrifos, alpha cypermethrin and propiconazole. With tight supply in China, many distributors from around the world are seeing this as an opportunity for India to step up and take some market share.
Whilst the Indians sense an opportunity, it’s not so simple. India’s manufacturing base isn’t as deeply integrated as China’s and therefore are still reliant on China for some of the intermediate chemicals in active ingredients. Though the importing of intermediates from China to India is big business, constraints in China are limiting production in India, causing prices to rise in both countries. This means in the short term, India won’t be able to respond to China’s supply shortages in a way that will alleviate the current shortages.
Indian manufacturers are confident the environmental changes in China are here to stay. Being acutely aware of their reliance, several factories are planning to invest in infrastructure that will allow them to produce all steps in the making of their products. This is likely to see significant investment and growth in India’s manufacturing sector over the next few years.
In 2017, we focused a lot on the supply issues affecting the market, so following significant widespread rains in November, it’s worth also observing the demand side of the equation. The rains have created demand for all summer knock down chemicals and despite many growers still harvesting, there’s been a high volume of purchasing over the past three weeks. As harvest finishes up in different areas there is a huge quantity of spraying needed to be completed.
We believe nearly all the lower priced glyphosate produced over the past 6 months has now been sold, with the price now moving towards $4.50/L (as we’ve been saying for the past three months).
The price rises we flagged in triclopyr and 24d will also transpire much quicker, as the lower priced stock gets accounted for. So, if you’re quick and purchase before the end of December, you’ll save more than if you wait until the New Year.
There are still genuine issues in relation to receiving goods from overseas, having them formulated in Australia and delivered on the truck to reach the market in the lead up to Christmas. All in all, challenging times that as ever can be managed by planning three months ahead not three weeks.
I would like to thank all our customers for their incredible support in 2017 and wish everyone a successful completion of their harvest. I hope you all have a wonderful and safe Christmas break and enjoy some time off in the New Year.
