Nearly one-fifth of the crop protection industry’s revenues could be impacted if the government goes ahead with its proposal to ban 27 pesticides, feels RV Bubna, CMD of Sharda Cropchem. These 27 pesticides account for roughly Rs 4,000 crore of the Rs 22,000 crore insecticide and pesticide market locally.
They account for 10-15 percent of export market for crop protection products and there is no clarity on whether they can be manufactured for exports. The industry is set to oppose the draft order.
Brokerage house IIFL says that this will not only seriously limit farmer options, but will also be detrimental for the “Make in India” model. IIFL estimates that these products represent 20 percent of the agrochemical industry’s annual revenues. While it expects industry to fight aggressively and defend the products, the fact that GoI has already banned 18 products under the same study is a cause of worry.
There are examples, suggesting that the bans are driven by the industry’s non-compliance with certain processes rather than an objective analysis of the hazards.
According to IIFL, most leading agrochemical companies could be hurt. However, among those impacted, UPL would be relatively better off, given its focus on branded exports, and ability to source technical know-how from other locations worldwide. In contrast, other companies either export technical know-how or sell domestic brands and so are more vulnerable.
Equirus estimates Rs 2,100-2,500 million (0.6 percent of FY20E revenue) impact on revenues for UPL and Rs 600-800 million (2.5-3.5 percent of FY20E revenue) impact on Rallis' revenues. They have only considered the impact with regard to sales in India and believe exports are not likely to be impacted.
Estimated market size of 27 products proposed to be banned is Rs 6,365 cr
(Source: IIFL)
Rs mn | Exports | Domestic | Total |
Acephate | 11500 | 9500 | 21000 |
Mancozeb | 11000 | 4500 | 15500 |
Monocrotophos | 3000 | 3000 | |
Chlorpyriphos | 4000 | ||
Pendimethalin | 2000 | 1500 | 3500 |
Diuron | 2000 | 2000 | |
Carbendazim | 200 | 1250 | 1450 |
IIFL has also enlisted company wise exposure to the proposed ban list
UPL:
Mancozeb, Acephate, Pendimethalin, Chlorpyriphos, Ziram, Monocrotophos, Deltamethrin, Zineb, 2,4‐D, Malathion
PI Industries:
Pendimethalin, Dichlorvos, Phorate (including previous bans)
Bayer Cropsciences:
Mancozeb (Sectin), Deltamethrin (Decis 100, Decis 2.8), Thiodicarb (Larvin)
Rallis India:
Acephate, Pendimethalin, Atrazine, Captan, Chlorpyriphos, Dimethoate, Oxyfluorfen, Sulphosulphuron
Coromandel:
Mancozeb, Malathion, Chlorpyriphos
Atul:
2,4‐D, Sulphosulphuron
Sumitomo Chemical:
Chlorpyriphos, Quinalphos
Insecticides India:
Chlorpyriphos, Monocrotophos, Acephate, Malathion, Sulphosulphuron, Butachlor
Dhanuka Agritech:
Quinalphos (Dhanulux), Mancozeb (Sixer, M‐45), Carbendazim (Dhanustin), 2,4‐D (Weedmar Super), Pendimethalin (Dhanutop)
First Published: May 20, 2020 1:01 PM IST
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