First-hand market research in Brazil: Glyphosate’s terminal-market price surged nearly 300%, increasing farmers' anxiety every day
Jul. 21, 2021
In the past ten years, the glyphosate price has reached a new high due to an imbalance in supply and demand structure and the price rise of upstream raw materials.
In the short period, one saw no increase in the capacity of glyphosate. So, a further price rise is foreseen. In light of the situation, AgroPages had the opportunity to invite an expert team from Brazil and other regions to conduct detailed market research into the glyphosate terminal market of major countries such as Brazil, Paraguay and Uruguay, to get a basic understanding of the current supply, inventory and price statuses of glyphosate in different markets.
The result of the research shows that the glyphosate market in South America is very tight, where inventory is insufficient even as the price is soaring. In Brazil, the soybean planting season is about to begin in September. In these circumstances, there is anxiety on the market, and there is not much time left for farmers.
Market prices of mainstream formulations surged nearly 300% over last year
The research team interviewed five major Brazilian distributors in major agricultural states - Mato Grosso, Parana, Goias and Rio Grande do Sul, and received answers to 32 questionnaires. Two major distributors were interviewed in Paraguay, as well as the president of the agricultural planting association of the city of Santa Rita City of Paraguay; In Uruguay, the research team met an agricultural material dealer who conducts a large number of businesses with cooperatives and agricultural companies each year.
The research reveals a significant price rise in the mainstream glyphosate formulations. So far, the price of glyphosate in the Brazilian market has risen 200% to 300% over the same period last year. Taking 480g/L AS, as an example, its recent price in Brazil hit US$6.20-7.30/L. According to Congshan Consultancy, in July 2020 the unit price of glyphosate 480g/L AS in Brazil was between $2.56-3.44/L, which nearly tripled year-on-year, as being calculated at the exchange rate of 0.19 between Brazilian real and US dollar. The highest price of glyphosate 79.4% WSG reached $12.70-13.80/kg in Brazil.
Mainstream glyphosate formulation prices ($) in Brazil, Paraguay and Uruguay in 2021
The terminal market price of glyphosate in Brazil in 2020 (Brazilian real)
Source of Data: Hills Consulting
Compared with the current price of glyphosate in the Chinese market (at the exchange rate of 0.15 between Yuan and the dollar), the price of bulk glyphosate 480g/L AS is $3.1/L; the price of glyphosate - 757 WSG is $5.77/kg, and the price of glyphosate-500 WP is $4.35/kg.
Market stocks are about to be depleted
At present, glyphosate is in short supply in Brazil's terminal market. Numerous agricultural material companies have already sold large quantities of glyphosate and agricultural inputs priced in Brazilian real in 2020, thus exhausting the inventory. In addition, considering the short supply of glyphosate in China at this time, there have been cancellations in purchase orders in Brazil, which has forced farmers to accept higher prices.
Moreover, the pandemic has caused congestion in shipping leading to delays in the main seaports worldwide, which has resulted in a rise of ocean freight to a historic high, having added up to an even higher cost to glyphosate. Currently, the freight cost of shipment to Paranagua from Shanghai is about $10,000, which may vary slightly in different ports. However, this part of the cost used to be generally below $1,000 in the past but is now 10 times higher. To make a calculation based on the glyphosate 480g/L AS, the freight cost per ton is roughly $400, which would be about $40 dollars in the past.
Brazil is about to begin a new round of soybean planting in September. At this moment, end users have generally expressed concerns over the future of glyphosate. Where will the glyphosate market go?
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2021 China Pesticide Exporting Worshop will be held in Hangzhou on August 26-27, 2021. AgroPages will invite Brazilian market experts participating in this survey to make a presentation of "The impact of product supply and demand, genetically modified crops and other end-market dynamics on the Brazil pesticide industry". There will also be many speakers from China and India to talk about the supply trend. Click to see the workshop agenda and make Virtual Participation:
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