Brief Overview of the Indian Agrochemical Industry - Presented by Gharda Chemicals Limited

<body bgcolor="#000000" text="#FFFFFF" topmargin="0" leftmargin="0"> <p align="center"><font size="6" color="#00FF00" face="Century Schoolbook">THE AGROCHEMICAL INDUSTRY</font></p> <p align="left"><strong><em><tt><font face="Century Schoolbook" size="5" color="#00FF00"><br> </font><a name="cropsit"></a></tt></em></strong><img src="../images/agroind/cropsitu.jpg" width="266" height="29" alt="cropsitu.jpg (9436 bytes)"></p> <p align="left"><font face="Verdana"><font size="4"><font color="#FFAB57"><strong>T</strong></font></font><font size="2">he total area under cultivation during 1998 approximates to 170 m ha. In the<img src="cropdistribution.gif" alt="Crop Distribution" align="right" width="310" height="185"> year 1998, wheat was grown on ~ 26.0 m ha, rice on ~ 42.0 m ha, pulses on ~ 26.0 m ha, cotton on ~ 9.00 m ha, groundnuts on ~ 8.0 m ha, soybean on ~ 6.0 m ha and sugarcane on ~ 4.0 m ha. Other important crops mainly cash crops are jute, tea, tobacco, cotton, sunflower, coffee, rubber, oilseed rape, vegetables, and fruits.</font></font></p> <p align="left"><font size="2" face="Verdana"><br> </font></p> <p align="left"><a name="Indian Agrochemical Market"></a></p> <p align="left"> </p> <p align="left"> </p> <p align="left"><img src="../images/agroind/indianagromkt.jpg" width="328" height="31" alt="indianagromkt.jpg (10116 bytes)"><strong><small><font face="Verdana"><br> </font></small><font color="#FFAB57" size="4" face="Verdana">    T</font></strong><font size="2" face="Verdana">he total market size of the Indian Agrochemical during 1998 was ~ Rs. 3000 crores which is a growth of about 16% over 1997. Insecticides are the largest product sector contributing to 75% of the total market. Currently around 129 insecticides are approved for use on crops. The key crop outlets for insecticides are cotton and rice, which account for 48% and 28% respectively of the total value of insecticide sales. Monocrotophos, <a href="../products/agroprod/pesticides/chlorpyrifos.html">Chlorpyrifos</a>, <a href="../products/agroprod/pesticides/quinalphos.html">Quinalphos</a>, Endosulfan, <a href="../products/agroprod/pesticides/cypermethrin.html">Cypermethrin</a> and <a href="../products/agroprod/pesticides/fenvalerate.html">Fenvalerate</a> are overall leaders.<br> </font></p> <table border="0" width="98%" cellpadding="0" cellspacing="0"> <tr> <td width="50%"><small><font face="Verdana"><img src="../images/agroind/agromktsector.gif" alt="Agro Market Center" width="320" height="183"></font></small></td> <td width="50%"><small><font face="Verdana"><img src="../images/agroind/insectcidesdistribution.gif" alt="Cropwise Insecticides Usage" width="313" height="183"></font></small></td> </tr> </table> <p align="left"><font face="Verdana"><font size="4"><font color="#FFAB57"><strong><br>     T</strong></font></font><font size="2">he use of fungicides is not well developed and accounted for 11% of the total</font><small><img src="herbicidesdistribution.gif" alt="Cropwise Herbicides Usage" align="right" width="310" height="193"></small><font size="2"> market. The fungicide market is dominated by Sulphur products, copper sulphate and copper oxychloride. The leading organic fungicide is Mancozeb, <a href="../products/agroprod/fungicides/carbendazim.html">Carbendazim</a>, Metalaxyl, Sulphur and Copper oxychloride. Rice is estimated to have accounted for about 58% of fungicide sales and fruits and vegetables for a further 20%.<br> </font></font></p> <p align="left"><small><font face="Verdana"><br> </font></small><font color="#FFAB57" size="4" face="Verdana"><strong>O</strong></font><font face="Verdana"><font size="2">verall the leading crop<font face="Verdana" size="2"><img src="cropsplit.gif" alt="Market Split by Crop" align="right" width="310" height="145"></font> sector in India is that of  cotton, which represented <br> 41% of the total market, followed by rice with 31% share, fruits & vegetables 15% and cereals 6% share.</font><small><br> </small></font></p> <p align="left"> </p> <p align="left"> </p> <p align="left"><strong><font color="#00FF00" size="4" face="Verdana"><em><tt><a name="World Agrochemical Market"></a><img src="../images/agroind/worldagromkt.jpg" width="317" height="29" alt="worldagromkt.jpg (9855 bytes)"><br> <br> </tt></em></font><font color="#FFAB57" face="Verdana" size="3">By</font><font face="Verdana" color="#FFAB57"><em><small> </small></em></font><font color="#FFAB57" face="Verdana" size="3">Region</font></strong><font face="Verdana"><small><br> </small><font size="2"><br> </font></font><font color="#FFAB57" size="4" face="Verdana"><strong>T</strong></font><font face="Verdana" size="2">otal world market = </font><font color="#FFFFFF" face="Verdana" size="2"><strong>$ 30,200 million </strong></font><font face="Verdana" size="2"><br> (2.6% increase over 1996)</font></p> <blockquote> <p align="left"><font face="Verdana"><small><img src="regionsplit.gif" alt="World Agrochemical Market" align="right" width="310" height="170"></small><font size="2"><br> North America <font color="#FFAB57"><strong>~ 34.5%</strong></font><br> West Europe <strong><font color="#FFAB57">~ 24.4%</font></strong><br> East Asia <strong><font color="#FFAB57">~ 17.6%</font></strong><br> Latin America <strong><font color="#FFAB57">~ 15.0%</font></strong><br> East Europe <font color="#FFAB57"><strong>~ 3.2%</strong></font><br> Rest <font color="#FFAB57"><strong>~ 5.3%</strong></font></font></font></p> </blockquote> <p align="left"> </p> <p align="left"><font face="Verdana" size="3" color="#FFAB57"><strong>By Product Class</strong></font><small><font color="#FFAB57" face="Verdana"> </font></small></p> <blockquote> <p align="left"><font face="Verdana"><small><img src="productsplit.gif" alt="World Market Split" align="right" width="310" height="182"></small><font size="2"><br> Insecticides: <strong><font color="#FFAB57">32%</font></strong><br> Herbicides: <strong><font color="#FFAB57">47%</font></strong><br> Fungicides: <strong><font color="#FFAB57">21%</font></strong><br> <br> <br> <br> <br> </font></font></p> <p align="left"> </p> </blockquote> <p align="left"><font size="2" face="Verdana"><br> </font></p> <p align="left"><img src="../images/agroind/agilanduse.jpg" width="332" height="30" alt="agilanduse.jpg (9759 bytes)"><font size="2" face="Verdana"><br> </font><strong><em><tt><a name="agroland"><font color="#00FF00" size="4" face="Verdana"></font></a><font color="#00FF00" size="3" face="Verdana"><br> </font></tt></em><font color="#FFAB57" face="Verdana" size="3">Usage</font></strong><small><font face="Verdana"><br> </font></small><font color="#FFAB57" size="4" face="Verdana"><strong><br> T</strong></font><small><font face="Verdana">he land may be divided into three topographical zones: the towering Himalayas in the north, the fertile, densely populated Indo-Gangetic alluvial plain in the north-central section, and the southern peninsula, dominated by the uplands of the Deccan plateau.<br> <br> </font></small><font color="#FFFFFF" size="2" face="Verdana"><strong>I</strong></font><small><font face="Verdana">ndian soils fall into three main groups: <font color="#FFAB57">alluvial, red and black.</font></font></small></p>  <table border="0" cellpadding="0" cellspacing="0" width="100%">  <tr>  <td valign="baseline" width="42"><img src="butt1.jpg" width="9" height="11" hspace="16"></td> <td valign="top" width="100%"><p align="left"><font face="Verdana"><font size="2"><font color="#FFFFFF">A</font></font><small>lluvial soils (the most common type) are found on the great plain, the northern and central highlands and the coastal tracts and deltas. They are productive and contribute most to the agricultural economy.</small></font></p>  </td> </tr>  <tr>  <td valign="baseline" width="42"><img src="butt1.jpg" width="9" height="11" hspace="16"></td> <td valign="top" width="100%"><p align="left"><font face="Verdana"><font size="2"><font color="#FFFFFF">R</font></font><small>ed soils occur in the southern Deccan plateau and the north east mountains. Fertility varies but they suit a range of crops when adequately irrigated.</small></font></p>  </td> </tr>  <tr>  <td valign="baseline" width="42"><img src="butt1.jpg" width="9" height="11" hspace="16"></td> <td valign="top" width="100%"><p align="left"><font face="Verdana"><font size="2"><font color="#FFFFFF">B</font></font><small>lack soils are found in central western India. Due to their water-retention and the climatic conditions of their location they are very suitable for cotton.</small></font></p>  </td> </tr>  </table> <p align="left"><font face="Verdana"><font size="3"><font color="#FFAB57"><strong>   C</strong></font></font><small>ropping pattern is dictated by the monsoons, there being two main cropping seasons. Kharif, the wet summer/autumn after the SW monsoon, supports a wide range of crops including rice, cotton, vegetables, pulses, sorghum, corn and groundnuts. The Rabi season (dry winter/spring) supports wheat, sugar cane, vegetables and pulses. In the south east of India there are winter rains with the SE monsoon.<br> <br> <img src="cultivatedarea.gif" alt="Cultivated Area" align="right" width="310" height="138"></small></font><font color="#FFAB57" size="3" face="Verdana"><strong>T</strong></font><small><font face="Verdana">he cultivated area is now over ~180 mn ha. Increases in irrigated area to over 70 mn ha and improved cultural practises have led to dramatic increases in yield in certain crops, notably wheat, rice and cotton. Slower progress has been made in improving yields of pulses and oil seeds which provide the main proteins and edible oils for the country. These crops are largely confined to poorer land and are monsoon dependent.<br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>    A</strong></font><small><font face="Verdana">way from the main river basins with river-fed systems much of India's irrigation is rainfall dependent, hence the critical importance of a good monsoon for the agricultural economy. The ultimate potential irrigated area is put at 114 mn ha. <br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>    C</strong></font><small><font face="Verdana">rop rotation is common, the systems varying according to the crops, irrigation availability, environment and custom. Good irrigation allows double or continuous cropping which benefits production but can increase the problems of pest attack.<br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>Farming infrastructure</strong></font><small><font face="Verdana"><br> <br> </font></small><font color="#FFAB57" size="4" face="Verdana"><strong>    I</strong></font><small><font face="Verdana">ndian farms are small, and getting smaller as land is divided within families. However, there is some amalgamation of working units as family members move away to work.<br>      <font color="#FFFF00"> </font><br> <img src="../images/agroind/farmholding.gif" alt="Farm Holding" align="right" width="193" height="121"></font></small><font color="#FFAB57" size="3" face="Verdana"><strong>T</strong></font><small><font face="Verdana">raditionally in a village of 1,000 families perhaps 200 families (usually of one caste) would own 95% of the land. Of the remainder a few would be tradesmen and the rest labourers working for a wage or a share of the crop. On smaller holdings subsistence only is possible. This system shows only slow change, hence rural discontent in  some areas and movement of people to the cities.</font></small></p> <p align="left"><font color="#FFAB57" size="3" face="Verdana"><strong>Main Crops</strong></font></p> <p align="center"><small><font face="Verdana"><br> <img src="../images/agroind/cropareadistribution.gif" alt="Crop Area Distribution" width="241" height="426"><br> <br> </font></small></p> <p align="left"><font color="#FFAB57" size="3" face="Verdana"><strong>Grower Profitability</strong></font><small><font face="Verdana"><br> <br> </font></small><font color="#FFAB57" size="4" face="Verdana"><strong>C</strong></font><small><font face="Verdana">urrently the most profitable crops, in descending order, are:</font></small></p> <p align="left"><small><font face="Verdana"><img src="butt.jpg" width="9" height="11" alt="butt.jpg (337 bytes)">    Vegetables <br> <img src="butt.jpg" width="9" height="11" alt="butt.jpg (337 bytes)">    Cotton <br> <img src="butt.jpg" width="9" height="11" alt="butt.jpg (337 bytes)">    Soybeans <br> <img src="butt.jpg" width="9" height="11" alt="butt.jpg (337 bytes)">    Fruits<br> <img src="butt.jpg" width="9" height="11" alt="butt.jpg (337 bytes)">    Oil seeds <br> <img src="butt.jpg" width="9" height="11" alt="butt.jpg (337 bytes)">    Plantation crops <br> <img src="butt.jpg" width="9" height="11" alt="butt.jpg (337 bytes)">    Cereals<br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>I</strong></font><small><font face="Verdana">t is on these crops that pesticide use is increasing.<br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>    H</strong></font><small><font face="Verdana">owever, the real situation is much more complex since topography and climate dictate that not all crops can be grown in all areas and suitable markets may not be available. Over large areas of India farmers are forced to rely on subsistence crops.<br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>    R</strong></font><small><font face="Verdana">eturns to the farmer can vary as prices fluctuate. At present guaranteed minimum prices for both wheat and rice are good.<br> </font></small></p> <p align="left"><font face="Verdana"><a name="AGRO- ECONOMIC STATUS"><font size="4"><font color="#00FF00"><strong><em><tt></tt></em></strong></font></font></a><img src="../images/agroind/agroecostat.jpg" width="266" height="30" alt="agroecostat.jpg (9224 bytes)"><small><br> <br> </small></font><font color="#FFAB57" size="4" face="Verdana"><strong>W</strong></font><small><font face="Verdana">ith 73% of the population considered rural and agriculture providing a quarter of GNP, this is an important part of the Indian economy.<br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>    S</strong></font><small><font face="Verdana">mall farm holdings and poor irrigation have limited development in some areas but in others growth has been impressive eg., the wheat/rice areas of Punjab and cotton in Andhra Pradesh. This development is necessary to keep pace with a population expected to be 996 mn by the end of the decade. Agriculture remains one of the least invested sectors. A government target of 15% priority sector lending to agriculture has not been achieved.<br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>    A</strong></font><font face="Verdana"><small>n important effect of the economic liberalisation policy has been a freeing of produce prices, farmers are getting better retums for their crops, at the expense of middlemen rather than the consumer, and rural incomes are rising. However, despite six years of liberalisation agriculture is still controlled by government dictates. Food grain trade is largely carried out under government directives. <br> <br> </small><font color="#FFAB57"><font size="2"><strong>M</strong></font><small>easures include:</small></font></font></p>  <table border="0" cellpadding="0" cellspacing="0" width="100%">  <tr>  <td valign="baseline" width="42"><img src="butt1.jpg" width="9" height="11" hspace="16"></td> <td valign="top" width="100%"><p align="left"><small><font face="Verdana">relaxing physical controls on key crop trading such as edible oils and cotton</font></small></p>  </td> </tr>  <tr>  <td valign="baseline" width="42"><img src="butt1.jpg" width="9" height="11" hspace="16"></td> <td valign="top" width="100%"><p align="left"><small><font face="Verdana">allowing domestic futures trading for ginned and baled cotton and jute goods, and setting up a global castor oil futures exchange</font></small></p>  </td> </tr>  <tr>  <td valign="baseline" width="42"><img src="butt1.jpg" width="9" height="11" hspace="16"></td> <td valign="top" width="100%"><p align="left"><small><font face="Verdana">reduction of customs duty on imports of vegetable and animal fats and oils from 40 to 30%.</font></small></p>  </td> </tr>  </table> <p align="left"><small><font face="Verdana"><img src="cropexports.gif" alt="Crop Exports" align="right" width="310" height="179"><br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>T</strong></font><small><font face="Verdana">here is a healthy export trade in agricultural produce which nets over US $2 bn annually. Export crops are prime targets for pesticide use, especially products with a minimum residue potential. <br> <br> </font></small><font color="#FFAB57" size="3" face="Verdana"><strong>    I</strong></font><small><font face="Verdana">n India where potential annual losses due to pests approach >Rs. 5000 crores, pest control is a necessity, not a choice. The pesticide industry remains dependent on the monsoon because a large part of the cultivated land does not have assured irrigation. However, India is amongst the top ten consumers of pesticides in the world.<br> </font></small></p> <p align="left"><a name="AGROCHEMICALECONOMICCLIMATE"></a><font face="Verdana"><font size="4"><font color="#00FF00"><strong><em><tt><br> </tt></em></strong></font></font><img src="../images/agroind/agroecoclimate.jpg" width="368" height="32" alt="agroecoclimate.jpg (10189 bytes)"><small><br> <br> </small></font><font face="Verdana" size="3"><strong><font color="#FFAB57">Main crops</font><font color="#00FF00"> </font></strong></font><font face="Verdana"><small><br> <br> </small></font><font face="Verdana" size="3" color="#FFAB57">Cotton</font></p> <blockquote> <p align="left"><small><font face="Verdana"><img src="../images/agroind/cotton.jpg" alt="Cotton" align="right" width="131" height="262"></font></small><font color="#FFAB57" size="4" face="Verdana"><strong>T</strong></font><small><font face="Verdana">he 8 mn ha of cotton remains the biggest outlet for insecticides with greatest use in and around the southern state of Andhra Pradesh where improved varieties need protection from a range of pests. Prices have been good until 1996 and there has been some increase in area grown.<br> <br> </font></small><font face="Verdana" size="3" color="#FFAB57"><strong>C</strong></font><small><font face="Verdana">otton is a strategic crop and is purchased by the government under the Monopoly Procurement Scheme. Exports are restricted in order to supply and support the indigenous cotton textile industry which is responsible for 8% of India's export earnings.<br> <br> </font></small><font face="Verdana" size="3" color="#FFAB57"><strong>I</strong></font><small><font face="Verdana">n the late 1980s cotton growers derived great benefit from low priced pyrethroids leading to gross overuse and the attendant problem of reduced efficacy. First Bemisia tabaci and then Heliothis<br> spp became serious problems. However, combined efforts of government and industry in the form of PEG India (Pyrethoid Efficacy Group), now reformed as IRAC, seem to be containing the problem with improved farmer training etc.<br> <br> </font></small><font face="Verdana" size="3" color="#FFAB57"><strong>C</strong></font><small><font face="Verdana">otton pest levels were low in 1996. Whitefly (Bemisia tabaci) was a problem in the north. Heliothis spp infestations were low in south/central India due to cyclonic rains. In fact, Heliothis spp has not been a serious problem for the last three years. Jassids have become a serious pest.<br> <br> </font></small><font color="#FFAB57" size="2" face="Verdana"><strong>B</strong></font><small><font face="Verdana">etween 12 to 15 sprays per season are accepted practice in central and southern India with six to ten being normal in the Punjab. Use of tank mixtures is common in cotton with farmers not always understanding the logic of product choice (he may mix two or three pyrethroids). Considerable education is being conducted in this area and the registration of the first preformulated insecticide mixtures would gradually ease the