Will China’s slowdown due to the coronavirus outbreak affect the availability of ag chemicals in the U.S. as the 2020 farming season starts?
Chinese factories account for a significant amount of crop protection products used in the U.S. and worldwide, manufacturing both active ingredients (aka, “technical” ingredients) and end-use formulations.
AgroPages, a newsletter covering the Chinese ag chemical industry, received numerous questions about that question, not just in terms of the U.S. supply line but from a global perspective.
In response, AgroPages surveyed China’s Top 100 ag chemical companies, companies that produce a wide range of materials, “such as glyphosate, glufosinate and other mainstream products,” AgroPages reported in today’s issue. At deadline, more than 70% of the companies had responded, even though the request for information fell during the country’s New Years holiday period.
Here’s what AgroPages reported:
Most Chinese agrochemical companies were set to stop working for about 2 weeks. As the scope of the virus outbreak became clear, China’s government quickly extended the one-week Spring Festival holiday, which is tied in with the New Year’s observation. The government required that enterprises and factories across the country delay the resumption of work.
In two provinces, Zhejiang and Jiangsu, government officials “clearly stipulated that in view of the need for epidemic prevention and control, enterprises should not resume work earlier than February 9. Therefore, the two provinces’ agrochemical enterprises, including technicals and formulations, will have one week more downtime of production than the normal two weeks.”
But some enterprises in Jiangsu Province did not stop “production during the holidays and have been operating normally, including 20 agrochemical enterprises in Yangkou Chemical Park in Nantong, Jiangsu, and they will continue to maintain the state of operation. These are mainly manufacturers of mainstream agrochemical products.”
Also, numerous companies in Shandong, Hebei, Inner Mongolia and other northern provinces – in particular the pesticide technical manufactures – kept facilities running during the Spring Festival. Those facilities are running at normal capacity, AgroPages reported.
“Enterprises manufacture bulk agrochemical products like glyphosate, glufosinate and other mainstream agrochemical products are mostly in normal production during the Spring Festival Holiday. Some of the others will also start production after the holiday ends.”
Questions About Raw Materials
One glitch may be a shortage of raw materials after the holiday wraps up due to transportation disruptions related to quarantines and controls on movement within the country.
“However, some said that the factories will usually reserve raw materials on a 40-day basis, and short-term production will not be affected,” the reported noted.
Companies responding to the survey were “generally optimistic that the epidemic situation will be resolved under the effective and strict control by the Chinese government, which they will actively cooperate and support,” the AgroPages report said.
As AgroPages pointed out, China’s ag chemical industry did encounter supply shortages in 2018 due to environmental protection enforcement issues and again in 2019 due to safety regulation concerns.
But AgroPages said that it doesn’t see a repeat of those supply shortages.