February 23, 2012
Rabobank: World fertiliser supply chain in tide of change
Fertiliser supply chain must change to adapt to market volatility, according to Rabobank.
In its latest report on "Finding Fertile Ground" on global fertiliser supply chain, Rabobank said that volatile fertiliser prices were changing roles and responsibilities of fertiliser supply chain decision-makers.
"The latest up-cycle in fertiliser commodity prices has not caused the panic-buying or high levels of overpriced inventory witnessed in 2007-08. The major difference is that the decision-makers in the supply chain have assumed new roles and responsibilities.
"Against a backdrop of structurally more volatile fertiliser prices, inventory management and price risk are shifting towards farmers. More transparency for all participants in the supply chain is needed as these market dynamics continue to evolve," Rabobank said.
Facing increasing challenges, farmers or smallholder merchandise retailers must revise their price risk management strategies and inventory control measures, the financial services company advised.
Manufacturers and fertiliser traders need to continue their repositioning to manage downstream changes, while wholesalers must choose between becoming highly effective logistics service providers or integrating downstream to get direct access to merchandise retailers and/or farmers, Rabobank added.
It concluded that increased transparency and better market guidance across the supply chain is essential for all players.