The commodity crisis could last for years, therefore it is necessary for agro-mechanical companies to develop long-term strategies.
In summary, this is what emerged from the fourth edition of FederUnacoma Think Tank in Bologna, dedicated to the geopolitical emergency and the crisis of raw materials.
An unstable scenario
The international scenario is characterized by numerous factors of instability, so agricultural engineering companies need to adopt extremely flexible strategies.
The military conflict between Russia and Ukraine has exacerbated the tension in the commodity market, combining with further increases in the logistics sector. In this context, the Country must diversify the supply channels, while companies must explore the opportunities offered by other markets, since it is highly probable that sanctions against Russia will last for years.
The consequences of inflation
Inflationary pressures on raw materials, as well as on logistics, compromise the productive capacity of the national agro-mechanical industry. And they also reduce the spending possibilities of agricultural companies, penalized above all by the increase in energy and fertilizer prices (of which Russia is the first world producer).
Responses to the reduction in cereal supplies
The reduction in cereal supplies from Eastern Europe is creating a conspicuous imbalance between supply and demand, which also affects the prices of agricultural commodities, creating the conditions for a global food crisis.
How to fill this production gap? With a new geography of crops. But also by increasing the arable land and investing in state-of-the-art agricultural machinery.
In this context, agro-mechanical companies must be reactive to changes in the scenario. And they must follow long-term strategies to mitigate exposure to the volatility of commodities.
On these issues, some interesting indications came from the technical discussion. The energy study group reiterated the need to diversify energy sources and supplies, by investing in renewable energies. In particular, it is necessary to strengthen the incentives for storage plants.
Regionalization of supplies
The question of industrial raw materials is also central. The Italian manufacturers of agricultural machinery must focus on the regionalization of supplies, through the collaboration with close and reliable partners. Collective purchasing and business networks can, in fact, strengthen companies’ bargaining power in negotiations with suppliers, thus improving contractual conditions.
Collaboration with researchers
In addition, the round-table on new materials highlighted the need for close collaboration between companies and the world of research, also taking advantage of EU funding channels. These new materials could solve many supply problems, but it is necessary to evaluate the use they can find in the production processes of agricultural mechanics.