Matt’s Market Update – September 2018
Desiccation
With desiccation approaching many of you would be planning to purchase paraquat. With strong price fluctuations in the past 12 months as well as poor demand, we think we can help you make some smart decisions. To recap, paraquat increased steadily throughout 2017, peaking in December at around $5/L for 250g/L formulations. The dry summer resulted in excess stock in the market, a lot of which is still here.
These factors led to some great June 30 deals
These factors led to some great June 30 deals in an attempt to clear the stock (in many instances below cost) and convert it into cash. Unfortunately for the owners of that stock, the market in China has declined by over 10% since December. Subsequently, the Australian market price has dropped to around $4.50/L, as importers have had to adjust to China’s new price to keep stock moving. The owners of the more expensive stock have had to take a loss to reflect the new market reality.
The price has stabilised
Over the past eight weeks, the price has stabilised. All companies have now purchased their stock for both desiccation and summer with costs locked in.
Any buying at around $4.50/L is the right price. Any higher and you’re being asked to pay last year’s prices. Retail is going to have to wear it as a cost of the dry weather and fluctuating markets; this is a win for you the growers!
