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3 Transformative Factors of Indian Agrochem Market

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 By Raju Kapoor, Director, Public & Industry Affairs, FMC India

India’s agrochemical industry has consistently clocked a double-digit CAGR of 16 per cent over the last five years against the global CAGR of 3 per cent. 2022 was a fruitful year too, clipping a 23 per cent growth, despite the hot summer and delayed monsoons. Factors such as increased crop production, healthy reservoir levels and an improvement in farm income all contributed to industry growth. With farmers learning more about improving their yields exponentially through agrochemicals, the market is set to continue its double-digit growth into 2023. Research firm Crisil predicts a growth rate of 15-17 per cent this year, as the sector is poised to solve two behemoth challenges – food and nutritional security to alleviate hunger and restoration of ecological balance in our lands. Let’s look at some of the factors sustaining the momentum.

Supply chain disruptions

The import/export game is changing tides in the sector. The Chinese government’s environmental clampdown has led to the closure of approximately 35 per cent small agrochemical manufacturing industries. When coupled with the US-China trade war, countries are adopting a ‘de-risk China’ strategy where India emerges as an   alternate and viable global sourcing point for agrochemicals. We can expect exports to remain one of the key contributors with a share of over 50 per cent in the industry’s total revenue in 2023.

Roll out of new crops 

While we are one of the largest producers of agrochemicals in the world, our farmlands use only 340 gms of pesticide per hectare, resulting in a crop loss of Rs 2 lakh crore per annum because of pest attacks. For example, Phalaris minor (gehunsa), a dangerous rabi weed that attacks wheat crops, can lead to 15-40 per cent crop loss if left unattended. With weeds consistently building better resistance against crop solutions, farmers will find it increasingly harder to produce good yields. Often, it’s the financial constraints that restrain our farmers from using pesticides. However, as food prices peak globally, farmers are expected to benefit from the surplus and spend on this heretofore low priority area.

Another aspect that will augur good growth of the sector is the government’s thrust for crop diversification. According to the Economic Survey 2022, our existing cropping pattern is skewed towards growing sugarcane, paddy, or wheat, which has resulted in the depletion of groundwater resources at an alarming rate in many parts of the country. Today, the regions that grow these crops face high to extremely high-water stress levels. With agriculture using 90 per cent of the groundwater table, the water crisis that we face is ushering in the cultivation of new crops. To promote sustainable agriculture, replenish the diminishing groundwater table, reduce import dependency, and help farmers get higher incomes, the government has increased the Minimum Support Price (MSP) of pulses, oilseeds, horticulture crops, and millets.

To read more click on: https://agrospectrumindia.com/e-magazine

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