The stocks of fertilizers and agrochemicals required by the Nicaraguan agricultural sector for the rest of the year are guaranteed, regardless of problems affecting the global logistics chainassured Mario Hanón, president of the Nicaraguan Association of Formulators and Distributors of Agrochemicals, (Anifoda).
The closure of borders —as a global response to try to stop the expansion of covid-19— more the invasion of Ukraineand later, the quarantine of the city and the mega port of Shanghai as part of China’s zero covid policy, converged to complicate world trade, especially the maritime transport of goods.
Although that represents a challenge For companies and industries that depend on imported products to operate, the agricultural sector can be partially calm, based on Hanon’s statements. Don’t worry, because the stocks of the formulas you require are guaranteed. Partly because prices are still high, and there’s no reason to believe that’s going to change anytime soon.
The impact for Nicaragua —due to the closure of the port of Shanghai— will be that the inventories of the entire industry suffer stress, and that there are some companies for which some orders come very late, but the most serious effects could occur in those products that they are too specific for a given crop, and that they have a marked ‘seasonal effect’, explained the expert.
As an example, he said that there are agrochemicals that are used only by peanut growers and only at a specific time of the year, so that if they do not come in a timely manner, the company that imports them would not be able to market them. “If they come too late, you will have to chinear those products for a whole year, which represents a cost that would have to be assumed, and that will affect the crop.”
For the rest of the products that are used throughout the year, imports are staggered, so “it is more difficult for there to be a shortage of a product that we all import and sell throughout the year. In this type of product it is very difficult for there to be a shortage, but for other specific, very specific ones, and with a marked ‘seasonal effect’, it is easy to assume that we are in danger of having a shortage”, he reiterated.
Stocked but expensive
In reference to fertilizers, which are decisive for increasing the yield —and profits— of the crops, he explained that these “are purchases where ships are chartered specifically to ports in Central America, including Corinto, so There won’t be any problem with fertilizers, because most of what is needed for the entire season is already tied up.”
Both sugar cane growers, as well as sorgueros and coffee growers, expect high export earningsbecause the conflict in Ukraine raised the prices of numerous commoditiesalthough they all regret having to face higher prices for the fertilizers and agrochemicals they need to produce more.
Although the union guarantees that the supply of fertilizers will be fluid, it recalled that “prices are through the roof, and they will continue through the roof for several more months.” The reason is that prices – already showing a trend towards standardization— they went back upis the accumulation of complications represented by the Russian aggression against Ukraine, as Hanno had previously explained.
Returning to the Shanghai issue, the union leader pointed out that “since the confinement was decreed, it is estimated that the export volumes that pass through Shanghai have fallen by 30%”, and that is another way of measuring the type of affectation, It implies that the reactivation of the port will not automatically end the bottleneck, and several weeks will be required to relieve the excess accumulated cargo and waiting ships.
“We are talking about a port that is part of a city of 28 million people. At first, the quarantine had a specific time that was extended. Merchandise can be diverted to the port of Hong Kong, but that takes a long time and, again, affects costs and times. It affects all the logistics,” he detailed.