Ten Factors Influencing India’s Crop Protection
14 February 2012 By Dr. Bipul Saha
Contributing Editor
A final look at 2011 shows some significant gains in crop production and government policies favorable to the double-digit growth enjoyed by the crop protection industry in 2011. A few notable factors influencing Indian crop protection companies are:
1) Record Grain Production in 2011: The agricultural sector performed well in 2011 with record grain production in the 2010-11 crop year, with production of wheat, pulses and coarse cereals reaching record highs. The development had an immediate effect on imports, which declined 20% in the case of pulses. The agricultural sector grew 6.6% in 2010/11 fiscal year compared with 0.4% in the previous year.
2) Food Security Bill held up: The Union Cabinet of Government of India proposed on December 18, 2011 the Food Security Bill that seeks to provide subsidized food to the 75% of the rural population and 50% of the urban population. As per the proposal, rice would be provided at 6 cents a kilogram, wheat at 4 cents a kilogram and coarse grains at 2 cents a kilogram. Many noted economists called it irresponsible as it will put huge burden on the Government. The Union Cabinet was subsequently forced to defer a decision and suggested more discussion.
3) Food inflation at 6-year low: Food inflation fell to a six-year low of 0.42% for the week ended on December 17, 2011 from 1.81% in the previous week. The key factor pulling down food inflation is a significant fall in onion, potato and wheat during this week.
4) Maize prices likely to remain firm: Increased demand from the poultry and starch industry is expected to keep maize prices firm in India during 2012.
5) Guar beat gold by huge margin in investment returns: Savvy speculators who carry out paper trades on local commodity bourses made superlative profits playing the Guar counter, which beat gold by a huge margin in terms of investment returns generated in 2011. Guar gum, a derivative of guar seed grown chiefly in Rajasthan and used as sealant by oil well drillers, yielded stupendous 269% return as against 32% by gold between December 2010 and December 2011. India produces 0.85 million tones of guar crop which is 80% of world production.
6) Sugarcane area may drop in Maharashtra due to water and labor shortage: The Maharashtra Government is fearing decline in sugarcane acreage in 2012-13 season due to groundwater scarcity and labor shortage. Because of the worsening labor shortage, the state as well as the Central Government are coming up with schemes of extending financial support to agricultural mechanization. The Government is giving 25% subsidy for purchase of cane harvesters. Sugar industries in the state of Maharashtra have purchased 82 such harvesters.
7) India getting Israeli help to raise vegetable yield: The National Horticulture Mission of India has joined hands with Israel to develop expertise for raising vegetable yield. The objective of “Indo-Israel Centre for Excellence in Vegetables” is to provide better quality seedlings to the farmers and to promote various types of vegetable though green house and poly-house farming.
8) Winter chill affecting tea output: The winter season came earlier this year in tea estate areas resulting in reduced output of tea. It is estimated that production has gone down 20% in November and 50% in December due to this. In India tea industry is growing at 15% expected to reach $6.2 Billion by 2015.
9) Higher output and poor export driving down spice prices: The prices of spices like cardamom, turmeric has gone down due to higher production, lower export and a lack of working capital to hold stocks. In the previous financial year the prices of spices were high. This led to increase in acreage of the spices this year. But, the European importers have reduced the quantity of purchases this year.
10) Fog hampers vegetable supply in North India: Dense fog in North India has affected the supply of vegetables. The trucks carrying vegetables from the northern states like Punjab, UP and Haryana have slowed down due to thick fog in Delhi and surrounding regions. The foggy weather, along with light drizzle, has hampered the growth of winter vegetables. Prices have increased due to bad weather conditions.
Dr. Bipul Saha is a contributing editor to Farm Chemicals International. He has more than 30 years of experience working for multinational and Indian crop protection companies, pharmaceutical companies and other chemical industry divisions. He most currently was a senior manager with Nagarjuna Agrichem Limited, and he has also worked for Gharda, Monsanto and Pfizer. He is a preeminent formulation chemist in India and is an astute observer Indian market influences that affect the domestic and global chemical market.
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