- Strategic partnerships are essential for agribusinesses to manage risk, secure inputs, and build resilience amid ongoing global supply chain disruptions.
- Factors such as pandemics, wars, tariffs, geopolitical rivalries, and climate shocks have exposed the vulnerabilities of traditional sourcing and procurement models.
- Long-term agreements, toll manufacturing, and joint ventures help companies lock in production volumes and secure priority supply arrangements, reducing exposure to shortages and price volatility.
A pandemic, wars, tariffs, geopolitical rivalries and climate-related shocks have destabilised global supply chains, fuelled price volatility and exposed the weaknesses of traditional sourcing models.
Against this backdrop, supply security is no longer a matter of opportunistic purchasing or price negotiation, but of long-term strategic partnerships, said CS Liew, founder and managing director of Pacific Agriscience, an agrochemical and crop protection company based in Singapore.
He advocated a more collaborative approach to supply security, emphasising that securing supply is about building durable partnerships that can withstand the shocks ahead.
“The whole supply chain has been shaken up. COVID was the beginning of these disruptions, causing a huge spike in prices. When there are disruptions from a logistics standpoint, if companies don’t have strategic tie-ups, they are left very vulnerable. In light of these factors, more needs to be done at the strategic level.”
Sharing the risks
These strategic partnerships, which range from long-term supplier agreements to toll manufacturing and joint ventures, are designed to secure access to inputs in uncertain conditions.
By locking in production volumes or establishing priority supply arrangements, companies can reduce exposure to sudden shortages and extreme price swings in open markets.
He noted that large multinational players already mitigate risks by building these strategic partnerships.
However, in the current environment, Liew encouraged mid-sized agribusinesses and large farming operations to adopt the same approach.
Historically, many of these companies relied on traditional procurement methods such as annual tenders. But in a volatile market, such approaches can leave buyers exposed to supply gaps.
Liew said that companies that remain dependent on transactional purchasing are more exposed to sudden disruptions and price spikes.
‘Disruptions won’t go away’
While governments in some countries have stepped in to secure fertiliser supplies, Liew said such efforts have limited impact and can sometimes be counterproductive.
He noted that government intervention is not a substitute for company-level strategy, and businesses must maintain a degree of independence in securing their supply chains.
The persistence of these risks suggests that volatility will remain a defining feature of agricultural supply chains in the coming years.
Looking ahead, Liew expects continued instability due to geopolitical conflict, climate change, and trade tensions.
“The only certainty is that disruptions are not going away. The war is not going to go away. Geopolitical rivalries are not going to go away. Climate change is not going to go away. These are major disruptive factors all buyers and suppliers need to deal with.”
In addition to partnerships, he added that companies are expected to increasingly prioritise diversifying supply sources to spread risk across regions and markets.
Climate variability will further reinforce the need for geographic diversification, both in sourcing inputs and in agricultural production.
