STAY CALM FOR CHEMICAL SUPPLIES

Issues with chemical supply are mostly limited at this point to Glyphosate, Trifluralin and Prosulfocarb.

There is no cause for panic at this stage. Timely supply for new orders of these goods is expected by April.

Corona Virus is just one factor negatively impacting chemical supply from China. Chemical factories are still producing, and logistics maybe challenging but are less of an issue nearer the port where chemical factories are located.

Chinese Factory Production

The impact of the Corona Virus on the supply of goods from China is greatly influenced by where factories are in relation to;

1. The epicentre of the outbreak around Wuhan in Hubei province where the impact on people and their movement is the greatest which could be restricting them from attending normal work. Chinese companies and factories are gradually returning to work, but it varies across provinces. If factories are in Hubei or other areas local areas that are enforcing tight restrictions on people movement, then output might well be at a standstill.

2. Distance to port as the movement of goods overland is hampered. Trucking services across all cities remain restricted because of the closure of selected highways and shortage of drivers – causing cargo deliveries to be under tight delivery constraints.

The most significant provinces for chemical production are the 3 coastal provinces of Shandong and Jiangsu just north of Shanghai, and Zhejiang just south of Shanghai. While Corona Virus is present in these provinces, particularly Zhejiang, chemical factories in these areas are mostly operational albeit with reduced staff numbers so production may not be at full capacity.

Logistics at Port

All key Chinese ports are operating, though with lower efficiency due to a limited workforce.

The effect on exporters to China is there now a massive shortage of empty containers worldwide due to the gridlock of containers sitting in China and in other parts of the world.

Product by Product Supply

Glyphosate – 4Farmers are expecting TGAC to make Glyphosate 450 and 540 in early April. From mid-April expect fully imported Glyphosate 470 to be available.

Trifluralin – New order are expected to be filled from around the middle of April. Even before Corona Virus, Trifluralin supply was expected to be late orders due to environmental restrictions.

Prosulfocarb – A new order is expected to be supplied from around the middle of April. Tight Prosulfocarb supply was always a possibility without Corona Virus issues, as there were issues like this in 2019.

Propyzamide – 4Farmers has all of its forecast liquid requirements on hand and is formulating them now. The granulated products will be available from mid-April, but this was a known problem independent of Corona Virus concerns.

Atrazine – Like Propyzamide 4Farmers has all of its liquid forecasted product on hand. Some granule stock is on hand, some are on the water for late March arrival, and some stock is scheduled for delivery in early April.

There are many other products like Triallate, Flutriafol, Ester, Triclopyr, insecticides and adjuvants that 4Farmers has on hand waiting for orders.

Conclusion

The Corona Virus pandemic is a dynamic situation that China is endeavouring to keep under tight containment. There is a feeling the situation is improving. Fortunately, 4Farmers has a strong relationship with suppliers in China that are trying to cooperate with us.

Providing shipping of some critical products go ahead as planned in the next couple on months, and farmers can accept April receival, then the supply of these goods should be fine. Many other products are on hand waiting for customer orders.

There still could be shortages created by demand surges in excess of forecast supply for certain products. For example, an increase in canola plantings will create extra demand for certain products.

Clients can best manage uncertainty by early planning and early placement of orders.

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