Stretchfilm supply warning for 2004

Contractors and farmers may be facing product shortages and price increases as they look to source their requirements for the coming season.

Traditionally, stretchfilm supply has been relatively constant with the UK and Irish markets consuming about 30,000 tonnes of black silage stretchwrap - from five or six major manufacturers - annually. This year, however, it is understood that one supplier, responsible for as much as 20% of production, has reduced stretchfilm output to develop industrial film opportunities because of the low level of profitability in agricultural film.

Crop Packaging Specialists UAT Ltd, which distributes about 9,000 tonnnes of stretchwrap on behalf of various manufacturers, claims that this could lead to major shortages, resulting in serious price increases as people become desperate for supply.

“You cannot replace up to 6,000 tonnes of black plastic at the click of a finger,” says UAT’s managing director, Bart Cope. “To replace this sort of volume requires not only a substantial investment, but also it could take up to two years to come on line.

“Another problem the industry faces is that the whole of Europe experienced the hottest year on record during 2003, this meant grass was scarce in many areas. Silage stocks have been high over the past 2/3 years, but have reduced drastically in some areas. If we have a good grass season, the demand for stretchwrap will be huge and, in such a scenario, I cannot see where the replacement supply will come from.

“On top of this, the demand for silage stretchwrap Worldwide, especially in emerging Eastern European countries, continues to increase. I think 2004 and 2005 could see demand outstripping supply until new production comes on line,” adds Bart.

Raw material suppliers are already seeing increased demand from other producers in order to try and satisfy the expected shortage. This has resulted in a price increase of about £70 per tonne on silage film raw material costs. This equates to about £2.00 (€3.00) per roll increase on a roll of black 750mm film.

UAT recommends that farmers, contractors and distributors look to secure their supply early, and fears that supply could dry up quickly if the season produces high crop yields.