Welcome to Field Key Players, the new interview program between the main representatives of the agricultural world. In Tarazona we assume the responsibility we have as manufacturers of biostimulants and plant nutrition products and, therefore, this initiative is born with the purpose and commitment to disseminate the knowledge of the main actors of the sector to value the entire chain.
The first chapter of “Field Key Players” deals with “The analysis of the raw materials market”. Angel Pérez, journalist of Interempresas Media, and Jose Manuel Vicente, Purchasing Manager of Antonio Tarazona, have been discussing and analyzing the main concerns for farmers.
Fertilizers, food, energy and raw materials are increasingly on the rise, and the bill has tripled in recent months. Farmers are facing this scenario. With this first chapter we want to explain first hand the situations that are generating these problems.
Angel: What is happening with commodity prices, is it a global trend caused by the pandemic?
Jose: This issue is affecting the world. Throughout the past year we have all noticed the generalized rise in prices, which affects practically all sectors and raw materials. For example, the coffee we drink every day has gone up 70% during 2021, oil, gas, metals and electricity have also been highly affected.
A: What factors are affecting this issue?
J: As a result of the pandemic there has been a very strong imbalance between supply and demand globally. In 2021 there was very high global growth and many countries have limited their exports, further reducing the available product. To this we have to add the problems in maritime and land transport. The effect has been a constant lack of availability and price increases, for example, with inflation in 2021 standing at 6.5% in Spain. Regarding availability, let’s take the case of the purchase of a new vehicle, the average delivery time has doubled to 8-9 months, partly due to the lack of chips. This is why this crisis is called the “chips and ships” crisis, because there is a lack of ships and a lack of chips.
A: Why are fertilizer prices going up, and what are the determining factors?
J: Fertilizers are no stranger to these increases and have risen sharply. There are several causes. Firstly, an increase in demand in some parts of the world, in line with the high prices of some crops such as cereals or soybeans. Secondly, the rise in costs, transport, energy, etc. And the third cause, I would say a decrease in supply, on the one hand, because countries like China or Russia, with a large market share have limited their exports of phosphates and nitrates to protect their markets and on the other hand international political factors such as the sanctions on Belarus that affect the supply of potash.
A: Let’s talk about the farmer, and above all let’s think about the farmer. How does the farmer have to act in view of all this situation?
J: The farmer has to buy what he has to apply and although prices are still high, the situation can change and it is the companies that have to assume that risk and not the farmer. We recommend that they get advice. The sales team is up to date with everything that happens in the market and they will be the ones to resolve any doubts or advise on the right moment to make the purchase.