This kharif cropping season is set to see a softening trend in prices of agrochemicals, mainly the generic herbicides and insecticides following the slump in global prices on huge inventories in China, the largest manufacturer of these chemicals, and muted global demand.
Agrochemical makers are seen under pressure to pass on the price decline to farmers even as the start of the kharif plantings of key crops such as cotton and maize among others is seen delayed due the late arrival of South-West monsoon.
“There is a price pressure because of in the international situation. There is some rollback effected in case of generic herbicides and some insecticides. People are doing it and that effect is getting into the market in phases,” said Rajesh Aggarwal, Managing Director of Insecticides (India) Ltd. The price decline varies from product to product and the extent of decline will be about 10-25 per cent in certain cases, Aggarwal said.
Challenging quarter
In fact, the rollback in product prices started from the fourth quarter of the previous financial year, during which many of the agrochemical players faced pricing challenges in the generic products due to the excess supply from China. “This kharif season the agro-chemical prices will be lower than last year as prices of particular generic products are down by 10-25 per cent due to excess manufacturing in China, while there’s no demand worldwide,” Bhavesh Shah, Managing Director, GSP Crop Science. Already many companies have started reducing prices mainly for generics such as glyphosate, paraquat, acephate, chloropyriphos, mancozeb and cypermethrin among others.
For the farmers, who traditionally face increased input costs, the anticipated decline in agro-chemical costs could provide a bit of relief. This price pressure has resulted in sluggish placements in the agro-chemical supply chain this year.
CS Shukla, Senior Vice President, Crystal Crop Protection Ltd said the price are headed southwards, but may not be applicable for all products. “We can expect the end prices to come down if there are no other cost pressures such as labour and fuel costs that could offset the decline in raw material prices,” he said.
“At the farmer level, lifting hasn’t started. Actual sales will happen from June end or July when the monsoon actually sets in, we may see real price changes,” Shukla said.