Rabobank: China’s energy crisis already impacting global agribusiness

A report by Rabobank states that the energy crisis in China is already impacting supply chains around the world. The food and agribusiness sectors are also affected, especially the production of fertilizers and pesticides. Exports of some inputs manufactured by the Chinese could be restricted and should increase prices on the global market.

“Fertilizers and agrochemicals will inevitably face increasing pressure from current coal shortages and electricity cuts. While the government’s emphasis is on securing the energy supply for fertilizer production, exports of nitrogen and phosphate fertilizers will be restricted, potentially boosting prices in the global market,” says the report.

Rabobank reports the impacts on Chinese staple food, animal protein, grain, dairy, and processed food chains. One of the alerts is for sectors that depend on paper and metal packaging, whose production was seriously affected by the energy crisis.

“Major paper manufacturers have announced a temporary stoppage, which could lead to a 10% to 15% reduction in the supply of paper packaging for September and October. Metal packaging, with aluminum prices fluctuating to highs of 13 years, may face even greater price spikes,” says Rabobank.

“In some regions, refrigerated storage has also suffered power cuts, increasing the costs of storing chilled and frozen products.” The report also says that several grain-crushing units for oil production, such as soybeans, have temporarily halted operations.

Source: Valor Econômico

To read the full original article, visit the link:

https://valor.globo.com/agronegocios/noticia/2021/10/08/crise-energetica-na-china-ja-gera-impactos-ao-agronegocio-mundial-diz-rabobank.ghtml

Sharing is caring!