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Rabobank  |   February 20, 2012 resize text

A new report from Rabobank's global Food & Agribusiness Research and Advisory department on the global fertilizer supply chain says that volatile fertilizer prices are changing the roles and responsibilities of fertilizer supply chain decision-makers.

In the report, titled "Finding Fertile Ground," Rabobank says that the fertilizer supply chain must change to flourish:

Rabobank's analysts say in the report, "The latest up-cycle in fertilizer 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 fertilizer 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 makes the following key points in the report:

Farmers or smallholder merchandise retailers must revise their price risk management strategies and inventory control measures.

Manufacturers and fertilizer traders need to continue their repositioning to manage downstream changes.

Wholesalers must choose between becoming highly effective logistics service providers or integrating downstream to get direct access to merchandise retailers and/or farmers.

Increased transparency and better market guidance across the supply chain is essential for all players.

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Comments (1) Leave a comment 

Morrisonville Ill.  |  February, 22, 2012 at 01:09 PM

Does anyone ever talk about the lack of competition in the industry anymore, there are not enough producers therefore unless they screw up they control the market to a large extent and now pass all the risk on to the retailer and farmers.