Agriculture input firms expect revival in rabi

The agri-input industry, which had a bad year due to the difficult environment following the deficient monsoon, is expected to make up its loss during the rabi season.

Agri-input consumption is picking up and dealers expect a strong growth of 25-30 per cent during rabi season, said Rohan Gupta, senior research analyst, Emkay Global Financial Services Ltd after interacting with dealers.

There has been progress in northern India, where water availability is better due to good monsoon and irrigation from rivers. During the kharif season, the worst affected was the herbicide category where sales were down more than 70 to 80 per cent and dealers were forced to return inventory he said.

According to a study by industry chamber Ficci in association with Tata Strategic Management Group, the Indian crop protection industry is expected to reach $7.5 billion by 2019 growing at compound annual growth rate (CAGR) of 12 per cent. It was estimated to be $4.25 billion in fiscal year 2014.

The West and South India, he said, continue to reel under water scarcity and water remains restricted only to talukas that have water reserves.

Agri-input consumption remains muted in these regions. Channel inventory for pesticides as well as fertilisers remains high.

The monsoon was patchy with some regions receiving better rainfall than others. The dealers in the central region expect to do much better and see a revenue growth of 10-15 per cent under normal monsoon conditions, primarily driven by volume growth in he branded segment.

According to Emkay Global, agri commodity prices continue to move upwards led by sharp increase in prices of pulses, soyabeans and maize among others.

The prices of agri commodities have increased 15 per cent on the back of expected shortage of key commodities due to the fall in production.