Business Standard: July 25, 2016
New Delhi: Indian agrochemical industry, which is estimated at $ 4.4 billion in FY15, is expected to grow at 7.5 percent annually to reach $ 6.3 billion by FY20, with domestic demand growing at 6.5 percent per annum and export demand at 9 percent per annum, according to a report jointly presented by Tata Strategic Management Group (TSMG) and FICCI at the latter’s sixth National Conference on Agrochemicals 2016 in New Delhi.
The report - titled as ‘Next generation Indian agriculture: Role of crop protection solutions’ - was released by Hukumdev Narayan Yadav, chairman, Standing Committee of Parliament on Agriculture and Farmers Welfare.
“Agrochemicals play a critical role in ensuring food and nutrition security of the nation. With estimated 355 MMTPA (million metric tonne per annum) food grain requirement by 2030 from current 253 MMTPA, efficient usage of crop protection products and solutions for Indian agriculture are the need of the hour. In order to realise the true potential, industry, government and regulatory bodies need to work in tandem and embrace digital technologies to further improve farmer connect,” commented Manish Panchal, senior practice head - chemicals & energy at Tata Strategic Management Group.
As per the report, the industry is dominated by insecticides accounting for 60 percent of the overall demand, followed by fungicides and herbicides contributing 18 percent and 16 percent, respectively.
The report highlights the changing food consumption patterns in India, demand patterns and future growth potential of crop protection industry in India. As per the report, there is a need of crop protection and crop enhancement solutions to overcome the challenges faced by Indian agriculture in ensuring food and nutritional security of the nation. To ensure sustainable agriculture in the country, it has also suggested adoption of the best global practices and the latest technologies which include agronomy, fertigation, seed treatment and biotechnology development.
The Indian agriculture sector is currently facing critical challenges like reduction in arable land, decreasing farm size, increasing pest attacks, low per hectare yield and a shift towards animal products consumption, all of which are leading to demand outpacing supply in the country’s food chain. Agrochemicals could play a significant role in overcoming this imbalance.
Indian crop protection market is supported by strong growth drivers. Current consumption of crop protection products in India at 0.6 kg per hectares (ha), is much lower than the world average of 3 kg per ha. This offers immense opportunities for future growth. With several products going off-patent globally, the sector is opening opportunities for generics, contract manufacturing & research for Indian players who can leverage their large scientific talent pool.
Despite the strong growth drivers, Indian agrochemicals industry faces challenges in terms of low awareness among farmers and rising sales of non-genuine products (approximately 25 percent by volume). With large number of end users spread across the vast geography, managing availability through a distribution network is a challenge for all the major players. A collaborative approach by the industry, government & regulatory bodies is the need of the hour to realise full potential of the agrochemicals industry.
Charu Kapoor, principal - chemicals practice, TSMG, added, “The Indian crop protection industry has seen a significant slowdown in the past two years due to two consecutive years of drought and weak global demand. The monsoon this year looks promising and the industry could see improved conditions. To reduce business volatility from such macro factors and build a more resilient business model, it is imperative for companies to explore adjacencies.”
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.