US-China trade war tariffs on seeds and crop protection products may raise food prices: BASF
The German chemicals giant says all global players will be affected to some degree
Import tariffs on seeds and crop protection products arising from the ongoing US-China trade war could result in higher food prices if they are sustained over the longer term, warns German chemicals giant BASF while stressing that it will not reduce its commitment to the China market.
“The duties have an impact and trade flows are changing … whenever you impose import tariffs, you can have an overall end user price increase which the industry always tries to avoid,” said Gustavo Carneiro, senior vice president, agricultural solutions Asia Pacific BASF in an interview.
Carneiro said all global industry players including BASF had been affected to some degree and the company was evaluating possible supply chain adjustments to minimise that.
Among the US$200 billion worth of Chinese products on which Washington has slapped an additional 10 per cent tariff from September 24 are weedkillers, pesticides, beans and vegetable seeds for sowing. The duty increment will rise to 25 per cent on January 1.
Increased costs from tariffs would weigh further on the global seeds and crop protection industry, which after the past few years of consolidation and investment in new technologies to raise competitiveness, is now on a growth trajectory.
The global seed market is worth US$40 billion and that for crop protection chemicals is US$53.7 billion, according to agrochemicals and seeds company Syngenta and agriculture chemicals consultants Phillips McDougall respectively.