Abstract
Synopsis
Indian Pesticides Industry... growth to come from domestic turf
Agriculture is the backbone of the Indian economy. Ensuring food security for
more than 1.21 bn Indian populations with diminishing cultivable land resource
is a herculean task. This necessitates use of high yielding variety of seeds,
balance use of fertilisers, judicious use of quality pesticides along with
education to farmers and the use of modern farming techniques.
The production of Indian pesticides industry has almost remained stable at
82000-85,000 MT during FY10. In value terms, the size of the Indian pesticide
industry was estimated at Rs.180 bn for 2010, including exports of Rs.100 bn.
Per hectare consumption of pesticide is low in India at 600 grams when
compared to the world average of 3000 grams. Low consumption can be attributed
to fragmented land holdings, lower level of irrigation, dependence on
monsoons, low awareness among farmers about the benefits of usage of
pesticides etc. India, being a tropical country, the consumption pattern is
also more skewed towards insecticides which accounted for 52% of the total
pesticide consumption in FY10. Rice is the highest pesticides consuming crop
in India forming 19.8% of the total pesticides consumption followed by cotton.
Andhra Pradesh is the highest pesticides consuming state (22%) followed by
Maharashtra & Punjab.
India due to its inherent strength of low-cost manufacturing and qualified
low-cost manpower is a net exporter of pesticides to countries such as USA and
some European & African countries. Exports formed 55.56% of total industry
revenues in FY10 and have grown at a Compounded Annual Growth Rate (CAGR) of
37.59% from FY06 to FY10.
Prior to 2005, i.e. in the process patent regime, Indian companies focused on
applied research and concentrated on marketing generic and off-patent
products. Due to this, the R&D expense by Indian companies was lower at
approximately 1% of turnover. Global companies focused on high-end specialty
products and dominated the market for patented new molecules. Globally,
pesticides companies spend 8-10% of their turnover on R&D. However, with the
onset of the product patent regime in India since 2005, the Indian companies
will need to increase R&D expense to meet competition from MNCs. Alternatively
Indian companies can be competitive in the area of Contract Research And
Manufacturing Services (CRAMS).
With the advent of the Integrated Pest Management (IPM) technique, the use of
biopesticides and Genetically Modified (GM) seeds has increased. Globally, GM
seeds are used mainly for commercial crops like cotton, maize, soyabean and
canola. In India, Bt. Cotton is widely used and the acreage stood at 9.4 mn ha
for 2010, a growth of12.17% over the previous year. Use of GM seeds may
diminish the use of insecticides but the use of herbicides may improve.
CARE Research feels that the demand for pesticides can be augmented only
through sustainable growth in agriculture. With the government' s focus on
development of the agriculture sector, the industry may see a better future.
Domestic market will be the key growth driver for Indian pesticides industry
in coming years unlike led by exports in previous years. Also, the Indian
pesticide industry is likely to move towards the global product mix, with
increasing use of herbicides and fungicides.
Table of Contents
Executive Summary
1. Industry Overview
- Overview
- Rationale for Pesticide Use
- Classification of Pesticides
2. Industry Features
- Low/Medium Capital intensive
- Fragmented Industry
- Seasonal demand
- High Working Capital requirement
- R&D - A need
- Increasing Export orientation
- Low Brand awareness
- Regulatory Framework
3. Safety Aspects - Human safety and Environmental safety
- Impact of non-judicious use of pesticides
- Steps for Judicious Pesticide usage
- Regulation monitoring safe usage of pesticides
4. Demand Drivers
- Crop Yield
- Area under agricultural crops & production in India
- Pest attack
- Price realization from crops
- Low level of Farmer awareness in India unlike globally
- Availability of Credit
- Focus on bio fuels
5. Statistics
- Installed Capacity & Production
- Consumption
- Domestic Consumption
- Crop-wise Consumption
- State-wise Consumption
6. Import - Export Trend
7. Cost & Profit Analysis
- Cost Analysis
- Duty Structure
- Pricing
- Profit Analysis
8. Competition Analysis
- Domestic
- Key products/brands of major players
- Global
9. Analytical model
- I Porter' s Five Force Model
- II SWOT Analysis
10. The Road Ahead
- Integrated Pest Management
- Biopesticides
- Genetically Modified (GM) Crops
11. Outlook
12. Company Scan
- A. United Phosphorus Ltd.
- B. Rallis India
- C. Bayer Crop Science Ltd
- D. BASF India Ltd.
13. Annexures
- I Types of Registration
- II Insecticides Registered under section 9 (3) of the Insecticide Act,
1968 As on November 13, 2009
- III List of Pesticides Refused for Registration
- IV List of Pesticides Restricted for use in India
- V Types of Pesticides & Pests they control
- VI MRL Value of Pesticides on Food Commodities
- VII Company-wise Projects Expected to be completed by 2012
- VIII Major Crop Damage Pest & Disease for the Year 2009-10
Figure Index
- 1 Input in Agriculture operation
- 2 Classification of Pesticides
- 3 Industry Structure
- 4 Production trend from FY03 toFY10
- 5 Pesticides Consumption Crop wise - FY10
- 6 Pesticides Market - State wise - FY10
- 7 Key Importing Counties FY10
- 8 Cost Breakup of Indian Key Players
- 9 Operating Profit Margins in 2010-11
- 10 Market Share FY10
- 11 Global GM seed Market from 2002 - 2010
Tables Index
- 1 Comparison between chemical and biopesticides
- 2 Company wise working capital requirement
- 3 R&D expense as a % of sales for Indian Companies
- 4 R&D expense as a % of sales for International Companies
- 5 Comparison of pesticide residues in food products for India vis-a-vis
World
- 6 Crop yield for various countries of the world
- 7 Area under agricultural crops & production in India
- 8 Trends in agricultural production of key crops
- 9 Per hectare pesticide consumption in different countries
- 10 Installed Capacity, Production and Utilization
- 11 Category wise consumption of pesticides - value wise
- 12 Category wise consumption of pesticides - volume wise
- 13 State wise pesticide consumption
- 14 Imports of Pesticides in Quantity, Value & Price per kg terms
- 15 Exports Data
- 16 Imported RM as a % of Total RM
- 17 Pesticide sales of leading MNCs for 2005 to 2010
- 18 State-wise Domestic adoption of Bt cotton
- 19 Biotech Crops in field trial in India 2008
- 20 Global area under GM crops
- 21 Country-wise Global area of biotech crops
- 22 Industry Average Ratios
