Date:08/11/2005 URL: http://www.thehindubusinessline.com/2005/11/08/stories/2005110801831200.htm

Back Agrochem sector pins hopes on rabi season

Latha Venkatraman

Mumbai , Nov. 7

DOMESTIC crop protection industry has had a drop in sales during the kharif season as continuous spells of rains kept pests away from the crop, industry representatives said.

Sales offtake during the kharif season may have fallen by 12-15 per cent, but the industry, which is largely dependent on pest, hopes that the rabi season could salvage the situation.

"The rabi season should be very good. We expect improved sales of agrochemicals as most of the reservoirs across the country are full," said Mr R.G. Agarwal, President, Crop Care India Ltd and Chairman, Dhanuka Group.

However, offtake of agrochemicals during the rabi season is much lower compared to the kharif season. "Yet, higher demand should provide some relief," he said.

According to Dr Venkatrao S. Sohoni, Managing Director, Rallis India India, there has been a drop in consumption of pesticides to the tune of Rs 250 crore during the kharif season. The market has declined to Rs 1,750 crore during this season compared to the previous Rs 2,000 crore in the kharif season. Exports have also declined marginally.

The bulk of the decline in sales was in the North and South with West also reporting a drop in offtake. "This year's kharif season was not good. Sales of agrochemicals were quite low, particularly in Punjab and Haryana. Overall most crop was in good condition with very little pest attacks," said Mr Pradeep Dave, President of Pesticides Manufacturers & Formulators Association of India.

The northern region, which is a large cotton growing area, had much low pest infestation. As a result, four to five pesticide sprays were lost, Dr Sohoni said at Rallis' second quarter result media presentation. In the western region, two to three sprays were lost, and in the South four to five sprays were lost. The eastern region recorded normal sales, he added.

Besides, prices of some of the pesticides - Chlorpyrifos and Endosulfan - have edged down over the previous year.

More importantly, the increasing acreage of BT cotton has also resulted in a substantial fall in the use of traditional pesticides, most company officials said. Cotton crop consumes a bulk of the pesticides. However, there have been reports of attacks of mites on BT cotton crop in Andhra Pradesh, Mr Agarwal said.

Agrochemical companies with a large exposure to cotton crop have diversified into other crop in anticipation of the drop in sales on account of BT cotton. Breadth of the portfolio acts as a hedge for agrochem companies, Dr Sohoni said.