By Surbhi Misra
Sept 23 (Reuters) – India’s weak monsoon is prompting farmers to cut spending on pesticides, fertilisers and seeds this year, the chief executive of Tata Chemicals unit Rallis India said.
The June-September monsoon, which accounts for nearly 70% of the country’s annual rainfall, has been erratic this year and remains well below normal, raising concerns about crop yields, rural incomes and food inflation in Asia’s No.3 economy.
Monsoon rainfall was 15% below the average, as of September 21, Barclays said this week, adding that rainfall was 18% below normal so far in September and 16% below normal in August.
“When rainfall certainty is very low, farmers tend to save on resources,” agrochemicals and seeds firm Rallis India Managing Director and CEO Gyanendra Shukla said in an interview earlier this week.
“Farmers are not very certain of full harvest as they would have anticipated.”
Indian farmers typically sow summer crops such as rice, soybeans and cotton from June as monsoon rains arrive, while winter crops including wheat and rapeseed are planted from October after the monsoon retreats.
“There will be compression in the overall use of crop protection products, fertilisers and seed,” Shukla said, highlighting how demand for herbicides and fungicides had been particularly weak.
Rallis peers Dhanuka Agritech and Godrej Agrovet have also blamed erratic monsoon rains for weak demand for crop-protection products.
India’s farm input sector is also ripe for consolidation, Shukla said, arguing that low barriers to entry had led to an overcrowded market.
“There are too many players,” he said, adding that companies focused on innovation and strong partnerships would be best positioned to withstand intensifying competition.
(Reporting by Surbhi Misra in Bengaluru; Editing by Dhanya Skariachan and Subhranshu Sahu)
