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Peat and Growing medium markets: supply and demandAt the moment the demand for various peat types for the Chinese market is stated with an immense sum of 100,000,000 m³ yearly. This quantity will be required in the Chinese market for the next 5 years. (Source: Chinese peat association).
The background of this great demand is the partly toxic contamination of agriculture soil. So also the vegetable production must for the most part be cultivated in closed cultivation systems and be covered. Who would like to get vegetables with overloaded heavy metal parts on the plate?
However, it does not appear that this postage is in any way related to the amount of harvested peat on the world market. Even if the harvested quantity would grow drastically in the near future, it is almost impossible to cover this demand.
Due to the global climate change in the last few years, more and more rainfall is expected in the summer months. This applies not only to Europe, but also to other countries such as Canada.
Of course, it does not always rain at all times, where peat is harvested. Thus not all plants from the peat and substrate industry are affected at the same time. This problem will therefore be reflected in various forms from time to time in the individual results of the various enterprises. Individual holdings will have to fight with shortages and others can also start a new season with certain excesses. However, the overall result will not alter the fact that it is impossible to cover this demand.
It is also a question of how certain individual companies deal with information in this regard. If an honest answer and honest details about the offer were discounted, this information would be taken by some competitors as a positive advertising medium. This is in the nature of a human business man.
We met with Thomas Zeitheim to find out more about what the market needs in the future. Mr. Zeitheim has been working in this segment for over 30 years. The tz professional agency is concerned exclusively with the needs and questions in the substrate industry and professional horticulture.
How do you see the international market development in this segment?
Basic markets, such as the market for the production of professional substrates, are currently in a positive trend. At the moment, the European markets are stagnating, but a certain "boom" is recorded in the Asian markets. Due to the high demand in the Chinese market, we will have a kind of "inebriation" in a short time. Many vendors would like to be a part of this boom and will be on their way to play in this "Eldorado". It is already apparent that this will lead to a big confusion on the market in the medium term.
Which principles should be taken into consideration?
Each supplier sees their own interests first and tries to achieve the greatest advantage for themselves. Short-term thinking? Is it really economic? However, in order to be able to use and build these markets in a long term, the interests of all must be brought to the fore. This means a lot of work, especially in education and information. This is precisely what we offer to our partners. A basis for long-term relation in the market.
How will you adapt to this?
I would like to give you an example of a small part of our principles: "... three businessmen are sitting around a table to negotiate a deal. A good deal is done when all three get up and go out of the room with the same smile. If, however, one of the three business people is happier than the other two, it can be assumed that no good and long-term deal has come out ... "
I personally have used this principle for a long time as an intent and will continue to work in the same way. Practical and honest information at the right time at the right partner.
For more information:
Engineer in Horticulture
Publication date: 11/2/2017
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