Monday, November 29, 1999

Pesticide industry poised to grow 3.2%: Rabo report

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After a subdued growth for over a decade, India's Rs 7,000-crore pesticide industry is likely to grow at 3.2% every year for the next 2-3 years, a report from Rabo India said. Increased affordability of Indian farmers, the growing number of pests and diseases, shifting crop patterns, crunch in farm labour availability and better price realisation for farmers will drive the industry revival, the report said."Crop protection chemicals (CPC) sales in the country will see a strong recovery in 2010 because of favourable weather, greater use of genetically-modified varieties which have lower irrigation requirements and the government's policy initiatives to support oilseed crops in particular," Vaishali Chopra, author of the Rabo India report, told FE."High commodity prices this year will positively impact CPC sales. The sector will grow 3.2% in 2010 in value terms (excluding growth from exports) and the growth would continue in the longer term (next five years) provided domestic players manage to capture the off-patent market," said Chopra.India accounts for 16% of global food grain output, but only 2% of global pesticides usage. Currently, 50% of the domestic pesticide market is controlled by multinational corporations (MNCs). In India, pesticide usage is limited to 167 lakh hectares. There are currently 218 pesticides registered in the country.Due to its low per-capita consumption, India presents a significant long-term growth potential for MNCs as well as generic companies. While MNCs play an important role in introducing newer molecules, there is growth opportunity for generic players in the off-patent market. "Most CPC companies in India are generic manufacturers. They are expected to enter into JVs or M&A deals with foreign players to get access to newer CPC molecules. This will certainly enhance their product portfolio and make them more competitive in the global CPC market," said Chopra.

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