Monsanto Glyphosate Lead on Supply Shortages: ‘Little to No Impact’

"South America right now the buildup phase for the 2015 planting season, so you should start seeing a certain amount of activity especially as we go into May, June and July in them prebuying for next year's crop. The indications that I have is that there is available supply to meet that need in that region in the world." --Louis Lucas, Monsanto; photo of harvested soybeans: courtesy United Soybean Board

“South America right now is in the buildup phase for the 2015 planting season, so you should start seeing a certain amount of activity especially as we go into May, June and July in them prebuying for next year’s crop. The indications that I have is that there is available supply to meet that need in that region in the world.” –Louis Lucas, Monsanto; photo of harvested soybeans: courtesy United Soybean Board

Monsanto’s global glyphosate and acetochlor lead, Louis Lucas, said in an interview with Farm Chemicals International that supply shortages due to Chinese environmental regulations, at least of glyphosate, have not affected Latin America thus far.

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The company has production facilities in Zárate, Argentina and two in Brazil: Camaçari and São Paulo, in addition to facilities in Europe, the United States and Asia that are “basically at capacity” in terms of glyphosate output. He said there have been supply chain interruptions of glycine in China but maintained it is a short-term issue.

Production plants in China that were interrupted back in late February and early March are coming back online, he explained, adding, “Right now there is certainly more supply than there is demand for the product, even though it’s been what I’d call very, very robust growth in both Brazil and Argentina.”

Lucas said Monsanto is still trying to figure out what exactly the impact of environmental changes in China will mean. At a governmental level in Beijing, it is clear that pressure to improve environmental standards is the impetus. “What we can’t figure out is provincial implementation of these newly announced policies,” Lucas explained. “Obviously there have been some well-publicized penalties that have been issued to individuals inside of certain companies; there’s even been prison time for individuals that have violated those policies. In terms of making huge structural changes in the amount of production in the chain, we just haven’t seen it.”

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Lucas added, “There seems to have been a shift in production from the small- and mid-sized companies to the larger producers.”

He acknowledged that some smaller and mid-sized producers have been shut down, but said larger producers have either expanded or have expansion plans underway designed to meet demand, even if they may have to spend more to meet those higher standards. Will this slow future production? He says it has had little to no impact so far. “As a matter of fact, we just had an hour-long conference with a consulting company out of China that would indicate that the expansion plans are moving along.”

Regarding dicamba and paraquat shortages globally, Lucas chalked those up to environmental-related regulatory pressure and strong demand. Growers’ demand for the products continues to rise as they seek out alternative chemistries to battle resistant weeds. “We’re already starting to see the expansion of manufacturing facilities in China and potentially in India to meet that demand [for dicamba,]” Lucas added.

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