India: Crop protection could be dearer this kharif season

Prices of pesticides and other crop protection chemicals will go up further by 10-15 per cent this kharif season. The appreciating dollar and Chinese yuan will increase the cost of production for manufacturers, who are planning to pass on the hike to farmers.

The Rs 10,000-crore industry, growing at 10 per cent annually, doesn't find it possible to absorb the increased costs. Another estimate puts the Indian agrochemicals market at Rs 16,000 crore. It is likely to reach Rs 25,000 crore by 2015.

Industry representatives told Business Line that the cost of imports of certain chemicals has gone up by 12-15 per cent. In some cases, it is even higher. “This will reflect in the price for the end user,” Mr V Vijay Shankar, Managing Director of Nagarjuna Agrichem, told Business Line.

Mr Ankur Aggrawal, Managing Director of the Rs 800-crore Crystal group, also felt that the rise in prices of crop protection products is imminent. The group acquired the pesticide brand Luphos-36 from Cheminova India.

"We import up to 40 per cent of all raw materials from China. With the dollar and the yuan gaining strength against the rupee, we see a significant rise in the cost of imports. The industry cannot absorb this kind of increase in the cost of production,” he said.

Mr Aggarwal however added that the rise in prices (of agrochemicals) should not affect farmers' incomes. He pointed out that the business faced uncertainty because of sudden shifts by farmers to different crops. “This will affect the availability of inputs, contributing to overall volatility,” he said.

In a good season, farmers generally use 8-10 sprays an acre, with each spray costing about Rs 300. But farmers in States such as Andhra Pradesh use many more rounds of sprays in the absence of timely extension advice.

Mr Rajesh Aggarwal, Managing Director of Insecticides India Limited, said that prices of solvents (used as fillers in liquid formulations) have gone up 60-70 per cent this year.

Excise duty too has gone up to 12 per cent from the earlier 10 per cent. All these factors have led to increase in the prices of pesticides for the current kharif season.