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The status of the supply chain of agricultural chemical products (agrochemicals) in the post-Covid market
9/2/2023 9:30:13 AM

The status of the supply chain of agricultural chemical products (agrochemicals) in the post-Covid market

The global supply chain is gradually returning to its normal state after three years of conflict with the Covid disease. Meanwhile, shipping companies have gotten better at managing supply and demand, and ocean shipping rates on some shipping lines have dropped to pre-pandemic levels. Of course, the decrease in transportation costs in the first place is more due to the decrease in demand and excess supply than it is due to the increase in global supply capacity. Companies producing agricultural chemical products are currently facing low transportation costs, reduced transportation rates, improved reliability, increased competition, and very low demand for this input. The reshaping of the post-Covid-19 supply chain has led to increased competition in regional agricultural markets. Multinational pesticide companies are choosing long-term strategic partners in China and outsourcing formulation production. This increased competition is likely to benefit the top agricultural pesticide companies, while also putting pressure on lower-ranked competitors. The challenge now is to predict when demand will return. Storage capacity is full, and it is not clear how long it will take for them to be completely used up. A recession with high inflation, slow economic growth and stagnant demand has complicated the current situation.

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