Glyphosate disruptions avoided due to good timing

IN LUCK: Australian farmers got most of their glyphosate supplies sorted before issues with a major supplier of raw materials to manufacture the herbicide.
IN LUCK: Australian farmers got most of their glyphosate supplies sorted before issues with a major supplier of raw materials to manufacture the herbicide.

A QUIRK of timing means the Australian grains industry will largely avoid major disruptions as a result of the glyphosate supply chain issues leading to Bayer declaring a force majeure event after one of its suppliers of raw material suffered severe damage.

While the world herbicide market is still assessing how much of an impact the factory breakdown will mean for supplies of glyphosate, in Australia much of the product required for the all-important autumn cropping period is already accounted for.

With gas prices, an important component in glyphosate prices, coming down, longer term it is expected prices will come off current highs, but the Bayer disruption may keep things higher a while longer.

Critically, it does not appear Australian farmers will have difficulty getting access to product when they need it.

"The disruptions mean that prices will take longer to drop back than you would have hoped otherwise but we've been lucky that our supplies have all pretty much been organised for the autumn," said Grain Growers chairman Brett Hosking.

Thomas Elder Markets analyst Andrew Whitelaw said the timing of the factory malfunctions meant it may not be a direct impact on Australian growers.

"There are places around the world where they are looking to get hold of supplies that this force majeure and the lack of supplies it may mean could have a real influence, but in Australia, just by the luck of timing, most of the autumn product needed is already organised," Mr Whitelaw said.

"Then, the next period of demand won't be until the spring, by which stage, if the reports are right, the factory supplying the raw products will be back up online anyway."

"It is just one of those lucky things mean it is unlucky to have too big of a disrupting influence on the autumn plant."

Mr Hosking said most growers were comfortable they could get supplies in time, even those who have not forward ordered.

"Many farmers have pre-ordered due to concerns about the supply chain, but in other areas they do not necessarily use glyphosate prior to sowing but they have spoken to their merchandise stores and are comfortable they will be able to get supplies if they decide they need them."

Ash Fraser, Victorian Farmers Federation grains group president, said farmers had been making preparations for this year's cropping for months now.

"If you said you were unprepared for delays in supplies of some inputs after the last couple of years we've had you must've been living under a rock," Mr Fraser said.

"We're well and truly used to the threat of supply chain disruptions and there was a lot of advice last year that glyphosate prices were going up so many ordered earlier before prices hit their current levels."

Prices for glyphosate in Australia remain high but have not risen in light of the Bayer news, with analysts tipping a gentle decline in line with world values once the current temporary tightness in supply is worked through.