Pest industry may take 15% hit if monsoon fails to revive

The Indian pesticides industry is eagerly looking forward to August 15. Not for the usual celebration of the Independence Day, but for a different reason. It expects the monsoon to recover by this time. If not, its bottom line this year would be hit.

So far, rainfall has been deficient in many parts of Andhra Pradesh, Uttar Pradesh, Rajasthan and Haryana. “If the situation continues the way it is today even by August 15, there will be a 10-15 per cent net effect on our income this year,” Director and Chief Operating Officer of Nagarjuna Agrichmem C M Ashok Muni told Business Standard.

On account of scanty rainfall, there has been more than 15 per cent decline in the consumption of pesticides in Andhra Pradesh during the current season. The state accounts for around 20 per cent of the Rs 7,500-crore pesticides market in the country.

“The situation in Andhra today is worse than what prevailed in the state in 2002,” said N Sukumar, managing director of Hyderabad Chemicals, a major producer of pesticides.

The increasing spread of genetically modified Bt cotton also did not augur well for the pesticides manufacturers. Bt (bacillus thuringiensis) is effective in preventing bollworm attack, a major pest that affects the cotton crop.

“Cotton is no more a big consumer of pesticides today. Earlier, the crop used to account for about 50 per cent of the total pesticides usage in the country. Now its share has dropped to less than 20 per cent,” Sukumar said.

At present, he said, paddy was driving the growth of the pesticides industry. The crop’s share in the total consumption of pesticides would be to the tune of 40 per cent.

The only solace for the pesticides firms in the current season was that rainfall had been good and widespread so far in central India, particularly in Gujarat, Madhya Pradesh and Maharashtra.

Nevertheless, industry representatives were hopeful that the situation would improve in the coming days. “Of course, hope is the driving force of our business,” Sukumar said.

“Since July 15, there has been a recovery in monsoon. We have moved away from the drought-like scenario. We hope the situation will improve further by the middle of this month,” Muni said.