The Hindu Business Line : Dry spell continues for agrochem industry

THE country's crop protection industry which has suffered the impact of erratic monsoon during the kharif sowing season may not find much solace in rabi sowing, industry sources say.

This is primarily because rabi prospects for the country do not appear bright at this point despite good rains in South India, they say.

Most of the northern states are facing subsoil moisture stress. Rajasthan, which is reeling under a drought, is a major producer of rapeseed mustard and pulses in the rabi season. Despite the availability of irrigation cover in the Northern States of Punjab, Haryana and Western Uttar Pradesh, water availability in reservoirs is not sufficient, industry sources say.

However, rains in South India have been good and could help groundnut, sunflowerseed and paddy in the States of Tamil Nadu, Andhra Pradesh and Karnataka.

The agrochemicals industry had lost a significant part of the kharif sowing season on account of a long dry spell in July 2002. Though monsoon rains revived in August they were not considered sufficient for agriculture.

According to Mr Pradeep Dave, President, Pesticides Manufacturers & Formulators Association of India (PMFAI), the industry lost sales to the tune of 15-30 per cent during the kharif season.

``Rabi does not look very encouraging. We expect domestic pesticide sales to be lower by 10-15 per cent. However, exports appear to be picking up,'' Mr Dave said. The sector had set a turnover target of Rs 3,800 crore for 2002-03.

Industry sources said offtake of agrochemicals continued to remain sluggish. This is primarily because the cotton crop, a leading consumer of agrochemicals, is at the end of its harvest.

On account of the drought in Rajasthan, planting of rapeseed mustard has not commenced. Wheat sowing in Punjab, Haryana and Western Uttar Pradesh has commenced but there are concerns about the absence of winter rains this season.

Having lost an important period of July-September 2002, most agrochemical companies are looking towards exports to offset the decline in sales in the first half of the current fiscal.

Excel Industries Ltd, which reported a net profit of Rs 6.31 crore (Rs 5.75 crore) on total income of Rs 242.46 crore (Rs 245.86 crore), is planning to focus on exports of agrochemicals during the second half of 2002-03.

Rallis India Ltd, a leading agrochemicals company, is also driving exports during the year in a bid to offset domestic sales decline.

Inadequate and erratic rains do not augur well for the agrochemicals industry mainly because pest attacks will be much lower on the fields. Besides, if sowing has not taken off at all the use of pesticide will not become necessary.

However, the domestic agrochemical industry appears to have found comfort in the recent Supreme Court judgement which dismissed an appeal of Central Board of Excise and Customs for recovery of Rs 210 crore.

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