Agrochemicals: Some business basics - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Agrochemicals: Some business basics

May 29, 2001

Agrochemicals (popularly known as pesticides) are basically a broad spectrum of chemicals that farmers use to protect crops from a whole host of insects, weeds, and diseases, both before harvesting and post harvesting. Whereas, herbicides are used during the early stage of crop cycle insecticides and fungicides are used in the later stage. The Indian agrochemical market has been pegged at around Rs 35 bn in FY00. Besides being dependent on the vagaries of monsoons, the demand remains skewed in favor of kharif crops (July to September period) with rice and cotton accounting for almost half the pesticides usage. Again, the mature agriculture states like Punjab, A.P. and Karnataka accounts for more than 60% of the total pesticides consumption. Another interesting feature of the Indian agrochemical market is the consumption pattern among different pesticides compared to global standards.

Pesticide Type % of total
consumption
Global
Benchmark (%)
Herbicides 10 48
Insecticides 76 29
Fungicides 13 17
Others 1 6

As is evident from the above table, domestically the consumption of pesticides is skewed towards insecticides. While globally a significant 48% of pesticides are consumed in the form of herbicides in India its a minuscule 10%. The reason for this is not hard to find.

Weeds are unwanted plants that compete with crops for water, light and nutrients. As a result, crops grow weak and become susceptible to diseases. All these factors cause acreage to drop drastically. Now, to remove these unwanted weeds there are two available options. Either resort to manual pulling or destroy weeds through chemical control i.e. herbicides. Manual pulling is not only labour intensive, the process also keeps the roots of these weeds undamaged. Most farmers in India resort to manual process of plucking these weeds to save high herbicides cost. However, the equation is changing. With farm labour becoming more and more dearer and farmers getting tuned in to best agricultural practices, the consumption of herbicides is rising.

Insecticides on the other hand cannot be replaced by labour and hence the consumption pattern looks skewed. The consumption of pesticides in India is just 600 gm per hectare as against 10 kgs per hectare in developed countries. Increase in farm income and gradual shift towards higher usage of herbicides is expected to increase consumption of agrochemicals.

Equitymaster requests your view! Post a comment on "Agrochemicals: Some business basics". Click here!

  

More Views on News

PUNJAB CHEMICAL 2020-21 Annual Report Analysis (Annual Result Update)

Nov 15, 2021 | Updated on Nov 15, 2021

Here's an analysis of the annual report of PUNJAB CHEMICAL for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of PUNJAB CHEMICAL. Also includes updates on the valuation of PUNJAB CHEMICAL.

KILPEST IND 2020-21 Annual Report Analysis (Annual Result Update)

Nov 9, 2021 | Updated on Nov 9, 2021

Here's an analysis of the annual report of KILPEST IND for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of KILPEST IND. Also includes updates on the valuation of KILPEST IND.

DHANUKA AGRITECH Announces Quarterly Results (1QFY22); Net Profit Down 6.2% (Quarterly Result Update)

Jul 31, 2021 | Updated on Jul 31, 2021

For the quarter ended June 2021, DHANUKA AGRITECH has posted a net profit of Rs 486 m (down 6.2% YoY). Sales on the other hand came in at Rs 4 bn (down 2.7% YoY). Read on for a complete analysis of DHANUKA AGRITECH's quarterly results.

BAYER CROPSCIENCE Announces Quarterly Results (4QFY21); Net Profit Up 96.5% (Quarterly Result Update)

Jul 8, 2021 | Updated on Jul 8, 2021

For the quarter ended March 2021, BAYER CROPSCIENCE has posted a net profit of Rs 619 m (up 96.5% YoY). Sales on the other hand came in at Rs 7 bn (up 60.0% YoY). Read on for a complete analysis of BAYER CROPSCIENCE's quarterly results.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS