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Brazil: Delay in 2016/17 agrochemical purchases could provoke logistical bottlenecks
Oct. 19, 2016
Acquisitions of agrochemicals for the 2016/2017 crop have been delayed by nearly 40%, compared to the previous cycle. This could provoke increases in the freight price and delays in deliveries, according to the president of Brazil’s National Association of Distributors of Veterinary and Agricultural Inputs, Henrique Mazotini.
Mazotini explained that it is normal for producers to buy crop protection products after the purchase of seeds and fertilizers. But he underlined that “this can provoke a logistical bottleneck, even though there will not be a lack of product, as the concentrated demand may generate a problem of supply.”
According to Mazotini, this delay in purchase is due to the political and economic instability in the country, which has led producers, who are awaiting a change in currency value, to delay the acquisitions. However, he noted that there is no significant price range for agrochemicals: “There were only adjustments facing the dollar value range and nothing that would impact the production costs.”
Another problem is the severe restriction of credit imposed by financial institutions, which remain more cautious due to the losses experienced in the previous cycle that generated a large number of defaults. Besides this, the one-month bank strike that ended recently has also delayed the release of loans.
Although there was a delay in agricultural input purchases, there was also “a 10% growth in revenue in the sector,” which generated a net worth of R$34 billion in the last season.
Source: AgroNews
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