Interview: Ample opportunities for Indian agrochem market
Jun. 2, 2010
Interview with Mr.Pradip Dave – President, PMFAI and Chairman, AIMCO Pesticides Limited
Recently Agropages made an interview with Mr. Pradip Dave, President of PMFAI. Mr. Dave shaped a clear picture of Indian pesticide market by his 30 years industry experience and knowledge.
Total Indian pesticide market domestic is worth $ 1.8 billion and the arable land is 145.2 million hectares with agricultural GDP of approximately $ 18.6 billion. India has diversity in geography, climate and soils, therefore, variety of crops are cultivated. It is the second/third largest producer of wheat, rice, sugar, groundnut, and the other main planted crops are jowar, pulses, maize, jute and coffee.
The share of the global crop protection market is only 7% in India. It is estimated that crops worth $ 19 billion are lost every year due to pest/diseases and storage and transport. Therefore the government should encourage the farmers to use more pesticides. The crop yield will increase by 12% - 15% if the pesticide can be used correctly. India offers attractive opportunities for pesticide usage. And, in recent years, Indian government advocated to develop more land to be planted and encouraged increasing investment in development of agriculture and countries. Today the consumption in India is around 450-500 gm per hectare. In other countries the consumption is as much as 18-20 kg per hectare. If consumption in India is increased to around 1.5 kg per hectare, there is tremendous scope for agrochemical market. India is one of the largest producers of pesticides in South East Asia. There are 11 multinationals, 60 AI producers, and 450 formulators in India. Most of them are PMFAI members.
Indian agrochemical market value reached $ 3.6 billion in 2009, among which approximately $ 1.8 billion is domestic market and $ 1.8 billion exports. Import is approximately above $500 million. The production of insecticides in 2009 is about $ 810 million, fungicides is $ 260 million, herbicide $ 290 million and others is $ 40 million. Mr. Dave gave us a brief summary of Indian agrochemical data of 2009.
Pesticide registration status
Talking about pesticide registration status in India, Mr. Dave told us the pesticide regulatory scenario in India is on the brink of change, with a new law has provision for Data Protection for 3 years which PMFAI has opposed as Patent Act is applicable to India since India is WTO member and there is no need for Data Protection since Patent Protection is available for 20 years for new molecules. Further Data Protection is likely to ever greening of Patent which PMFAI oppose.
The greatest hindrance that Indian companies face in capturing a greater market is the registration of the product globally. For example, the cost of registration in the U.S. is around $ 4 to 10 million per product, which Indian companies cannot afford. Not only costly in process but also very time consuming as voluminous data has to be provided. Therefore the Indian industry is not able to compete in many parts of the world. Indian Pesticides manufacturers are very strong in generic products as well as off patent products, which are likely to introduce in India in future due to better infrastructure, R&D facility and expertise in process knowhow, added to availability of very cheaper raw-material, labor which attracted major multi-national to have contractual research and production, joint ventures and some of the multi-national are operating almost for last 50 years. This indicates the potentiality of Indian market.
Opportunity and challenges of post-patent products in India
India is strong generic market and almost 80% market contributes to generic products. The off-patent products which are not registered in India are marketed under "import of formulations without registering its technical grade pesticides to have back-door patent protection and these products contributes 20% market against which PMFAI is strongly representing to Central Insecticides Board to stop such registrations. As such registration provides monopoly to the importers and farmers pay very high price to such pesticide formulations. For example, Emamectin was sold under monopolistic supply at US$ 195 per kg and after receipt of more registrations to the Indian companies, the rate is around $ 130 per kg. These are indicative prices.
Bright outlook for coming year……
There is tremendous opportunity for Indian Pesticide Industry to manufacture and introduce off patent products but due to the registration ambiguity, industrys progress has been on hold. As Indian Scientists and Technicians are capable to invent product process and produce the best quality pesticides, the opportunities are ample which has bright outlook for coming years. Due to better infrastructure and Research & Development programmes which are funded by Government and also due to annual growth of 15 to 20%, Indian agrochemical industry is capable of setting up new plants and also introduce new molecules.
Pesticides Manufactures & Formulators Association of India (PMFAI) is to promote understanding of the pesticide industry (crop protection) to society and coordinate the activities of the members of the Association, and to liaise and interact with various government organizations and industry associations. PMFAI comprises 250 members across the country, promoting safe, eco-friendly and judicious use of Agrochemicals. PMFAI has also projected Indian Pesticide Industry in global market and this effort started in 1997 by organizing its first International Crop Science Exhibition and Trade Meet in Mumbai, India to attract global importers, manufacturers and traders. During this period our export was approximately $ 60 million. Till this date we have organized International Crop Science Conferences at Thailand, Malaysia and the next is in Turkey in June 21-22, 2010. Indian export is now reached $ 1.8 billion dollars. This is only due to the efforts of PMFAI.
About Mr. Pradip P Dave
Mr. Dave has led PMFAI for 20 years, taking the organization from just a few dozen members when he took the helm to more than 250 today and also export of pesticides has gone up from just $ 60 million to $ 1.8 billion.
Mr.Dave has positioned PMFAI as an expert organization for regulators, a necessary function to protect the longevity of generic producers and their ability to control their livelihood as regulators take aim on legacy actives in favor of newer chemistries. And now he is taking that concept global, with a little help from other associations. With efforts of PMFAI and Mr. Pradip Dave, PMFAI has become founder member of Agro Care Association, Poenaardlaan 7, B-3090 Overijse, Belgium, which is a global Association and protect the interests of generic producers of pesticides. Agro Care Association is formed by the world’s leading associations, representing ALINA (consisting of 17 countries from Latin America), PMFAI India, European Crop Care Association (ECCA), Brussels, China Crop Protection Industry Association (CCPIA), Beijing. Agro Care Association protect the interests of generic pesticide manufacturers all over the world and represent them in various global bodies such as FAO, WHO, WTO, UNIDO and UNDP.
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