The prediction of a normal monsoon has raised the hopes for agri-input companies, especially fertiliser and pesticide makers, who are expecting a rebound in demand.
“The monsoon forecast has been good and we believe there will be a pick-up in demand,” said Kapil Mehan, Managing Director of Coromandel International Ltd, which reported an 8 per cent drop in sales for fiscal 2013 over last year.
Stockpile
Fertiliser makers such as IFFCO and Coromandel had faced a double-whammy last year as prices of the non-urea, potassic and phosphatic nutrients had shot up on spiralling global prices and poor offtake by farmers due to erratic monsoon.
This had resulted in a build-up of stocks of these nutrients, currently estimated at about eight million tonnes, of which the di-ammonium phosphate (DAP) stocks alone are pegged at 5.5 million tonnes.
Higher prices
“A normal monsoon should increase the demand for fertilisers,” said P.S Gahlaut, Managing Director of Indian Potash Ltd (IPL).
Gahlaut believes that with the normal rains, the farmers could be convinced to accept the prices of decontrolled complexes. The rise in prices of the potassic and phosphatic complexes last year had prompted the farmers to switch over and use more of cheaper urea. It’s not only the fertiliser companies, even the pesticide makers are bullish on better monsoon prospects and expect sales to rebound.
Pesticide cos
“The forecast of a normal monsoon is important considering that there have been deficient rains in the past 18 months. There is a reasonable demand for crop care products from the distributor’s perspective. The movement of products such as herbicide has already started ahead of the kharif sowings,” said Rajesh Aggarwal, Managing Director of Insecticides (India) Ltd.
vishwanath.kulkarni@thehindu.co.in