We hope you have had a good Spring. Our team on the ground have been hearing mixed reviews with a lack of warmth and sunshine holding back production in many areas. Please find below an update on pricing and the current supply and shipping situation.
Effective today we have increased our DAP price to $712/tonne. This comes as a result of significantly increased shipping costs ex Asia. Shipping rates out of Asia to NZ are currently up by 400%-500% which is adding approximately 100 NZD/tonne to the landed product price. While we have been able to move some of our DAP demand away from the Asian market we are still currently reliant on this market for a portion of our volume hence the small price increase.
All other product prices remain unchanged at this time. Dickie Direct has strong supply relationships across the globe which has allowed us to move quickly into these markets and avoid the upward pressure on pricing which has come as a result of shipping out of the Asian market. At Dickie Direct we have worked hard to discover new products, markets and suppliers and as result we are now dealing directly with multiple suppliers across 9 countries and multiple continents.
Shipping delays have been the cause of large product shortages across all industries. While this has been a big challenge we have so far managed to navigate these relatively unscathed. With our new larger warehousing facility and through doubling our lead in time we have been able to carry more stock on hand and ensure shipments have so far landed as we have needed them.
At the beginning of this year shipping lines were forecasting an increase in global demand of 2%, since the impact of Covid this has been sitting at 30%. This is simply a result of increased consumerism with suppliers also trying to make up for lost time during the early stages of Covid.
While shipping lines have more cargo than they can currently move and with many ports operating well beyond capacity the real bottle neck is coming from a shortage of containers or more importantly a shortage of containers in the right areas. With countries going in and out of lock down empty containers are piling up around the globe with shipping lines struggling to relocate these containers back into exporting markets. Shipping lines are used to seeing increased volumes in the lead in to the Christmas period and Chinese New Year which this year falls on the 12th of February. However, this year is certainly one for the record books and with a large tail end increased demand is likely to push beyond the Chinese New Year Period.
We will be sure to keep you updated on this situation, as mentioned above we are currently managing to work our way around these delays and for the majority of products a strengthened exchange rate has for the greater part offset any additional price increases.
All the best with the busy lead into the end of the year. If you would like to get a better insight into the market I am happy to discuss with you (Charles – 0274308991). If you are wanting to discuss and plan an upcoming fertiliser application be sure to give one of our knowledgeable team a call.
Charles and the Dickie Direct Team