Herbicide supply hit by China factory shutdowns - Supply Management

Herbicide supply hit by China factory shutdowns

12 February 2018

Growers in Western Australia have been urged to speak to their herbicide suppliers as the impacts of China’s pollution crackdown takes effect.

During the last six months, China’s government has closed down tens of thousands of coal-powered factories in an effort to reduce emissions from heavily polluting industries by 30%. 

The Western Australian Farmers Federation said the Chinese government’s new environmental regulations have increased compliance costs for manufacturers in the country and reduced their capacity. As a result, it has pushed up prices on most herbicide products by 5-30%.

Zach Walsh, WA Landmark merchandise manager, told Farmweekly that with summer spraying underway across most of the WA grain belt, it had been a difficult few months locking in pricing and ensuring adequate stock was available. 

“It has definitely been more challenging for our procurement team with China and getting pricing and confirming supply than what we have seen before,” he said. 

“They [the Chinese government] closed a lot of factories and intermediate suppliers over their winter. That’s not ideal timing for Australia because we’re getting all of our product made and shipped in that November to January period, so we really had to try and bring things forward where we could.

“It’s not a cause for panic but I would encourage growers—if there was a year to get your programs organised with your agronomist and get an early order in to you reseller – this would be your year.”

Brendon Joss, regional operations manager at farm supplier Elders, said most suppliers had recognised the situation months ago and proactively bought stock.

“I think most retailers – certainly us – have really understood the tightness of supply out of China,” he said.

“We were actively purchasing in the market back in September for glyphosate particularly and trying to get ahead of the curve of the price increases.” 

He added that growers should also do their part and communicate with their suppliers. 

“I don’t necessarily believe the growers have felt any shortage at all – I think they were well organised and retailers were well organised and got their clients in a position where they had products in shed,” he said.

“Retail sheds have adequate supplies right now but that doesn’t mean growers shouldn’t let their retailer know what they want forecast and make commitments. 

“We are encouraging our growers to give us an indication of what they might need – we understand that may change as the season moves on but it gives us an opportunity to have what they want in store ready for them.” 

Walsh said with the Bureau of Meteorology forecasting a wetter than average three months from February to April in WA, the outlook for the 2018 was positive. 

“I think growers will be pretty bullish about their cropping programs and hopefully they can get off to a good start in April,” he said.

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