Due to the lack of raw materials, producers must be careful when purchasing machines and implements.

The pandemic caused by the coronavirus had an impact on several segments and markets. One of them was machinery and implements in agribusiness, which began to face problems with the supply of raw materials. An online survey carried out by the Center for Industries of the State of São Paulo (CIESP) evaluated the effects of the six months of the pandemic on the industry, and showed that 47% of companies are finding it difficult to obtain inputs, raw materials and goods.

Furthermore, the survey also showed that 63% of companies have low stock, causing the price of raw materials to increase considerably. This study carried out in greater São Paulo gives us a sample of the situation throughout Brazil. MP Agro de Ibaté-SP, for example, a manufacturer of fertilizer distributors, is one of the companies that is having difficulties with suppliers: “We started to feel the impact in the first months after the start of the pandemic, but in this last quarter the situation has intensified”, explains the CEO, Douglas Peccin.

Heated demand

Another highlight is the great challenge of meeting the strong resumption of demand from the countryside, as with the pandemic, there was an abrupt slowdown and the resumption occurred in the same way, forming a "V". “The months passed and stocks in general ended up being reduced to minimum operating levels, which caused shortages in the market and important readjustments from our suppliers”, points out MP Agro's supply manager, Edson Marchetti.

The company has its management system certified by ISO 9001 and an organized planning structure, which allowed it to guarantee continuous production during 2020. “However, if this situation continues for a few more months, the industry, as well as the entire market, will feel even more so the scarcity of final product at the end. The scenario is very uncertain in relation to supply, we don't know what the next few months will be like, we are living one day after another”, adds the manufacturer's CEO.

What the suppliers say

There are several reasons given for the adverse situation between supply and demand in Brazil. The rise in the dollar, low production due to the drop in production strength caused by the reduction of employees in factories, the increase in exports due to the favorable exchange rate and also the normalization of demand in countries where the disease is more controlled.

The director of purchasing and quality at Suprir, one of MP Agro's suppliers, Lucas Santos, talks about the steel scenario. According to him, Brazil is experiencing a period of great expansion in consumption, and this has led to delays in the supply chain. “When the pandemic emerged, we predicted that demand recovery would be slow in the second half of 2020, and to our surprise, we have seen a strong recovery in recent months. Furthermore, the second lockdown in Europe is being carried out more precisely and having little impact on industrial activity,” he says. Which confirms the moment felt by the fertilizer distributor manufacturer.

The representative of Cordob Indústria e Comércio, Wemerson Ricardo Cano, manufacturer of sheet metal processing solutions, states that there were several increases from July 2020. “The carbon steel FQ coils had an impact with variations of up to 100% depending thickness, as well as inputs in general, such as gas, nitrogen, electricity and other consumables", he states.

The director of MP Agro endorses that even with all the bad weather faced this year, the company has spared no effort to fulfill its commitments to the customer, managing to maintain deliveries. However, according to him, the supply of raw materials should only return to normal at the end of the first quarter of 2021. “The big impact is on our client who needs the product, the machinery to produce it and cannot lose the team of his production, so it is important that he is attentive and makes his purchases in advance to guarantee his machine in the field when he uses it”, reports Douglas Peccin.