Following continuous requests from the industry, pesticides are now included in the list of “essential items”. Previously, only agri inputs like seeds and fertilizers were included in the essential commodities act.
However, due to the ongoing lockdown, approval from local authority is required to run the pesticide, seed manufacturing or fertilizer plants, which may take 8-10 days. Also, pesticide companies are allowed to operate plants with only 10 percent workforce, and this is leading to constrained production.
Also, even after the lockdown is lifted, it would take minimum 6-7 days to restore production to normal levels, particularly because labor force has left for their home towns.
Manufacturing of pesticides usually happens from March to May and supply for Kharif starts from May to June. Kharif season (May to September) forms 75 percent of pesticide consumption and Rabi (November to January) for 25 percent. Current channel inventory will be able to meet 30 percent Kharif demand. Another 50 percent of Kharif demand will be met if production starts fully from May. Hence, prices of pesticides are likely to increase due to supply shortage.
Issues on the logistics, labor, raw material and restricting role of the domestic manufacturers where there was an expectation that Indian companies would be the alternative after supply chain collapse in China.
Kharif season could be impacted if the lockdown prolongs.
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