India’s Department of
Agriculture, Cooperation and Farmers’ Welfare issued the Order to Ban
Pesticides (Draft) (2020) on May 14, stipulating that import,
production, sale, transportation, distribution and application of certain
pesticides are to be forbidden after the issuance of the official order. 27
pesticides, including 7 herbicides, are to be forbidden, including atrazine,
butachlor, 2,4-D, diuron, oxyfluorfen, pendimethalin and sulfosulfuron. Related
agrochemical companies in China may benefit if India ceases to produce these
pesticides.
In 2013, the Indian government established a committee in order to examine
and review 66 types of agrochemicals that were banned or restricted in other
countries. In 2018, this committee banned the use of 18 types of agrochemicals.
According an official from India’s Department of Agriculture, who wished to
remain anonymous, 27 more chemicals are expected to be banned, with 6 currently
under review, and 15 that have been determined to be safe for use.
Among the 27 agrochemicals expected to be banned are acephate, atrazine, benfuracarb, Butachlor, carbofuran, diuron, oxyfluorfen, pendimethalin and sulfosulfuron, and
2,4-D. The Indian government will publicly announce within 45 days precisely
which agrochemicals are to be banned.
The agricultural industry of India is puzzled by these actions from the
Indian government and has repeatedly expressed opposition to these measures. A
person working in the agricultural industry stated that the government’s plan
was met with surprise, as it came immediately after an announcement of a plan
to support domestic products and to stimulate and strengthen the Indian
economy. However, these agrochemical bans will increase the expenses of those
in the agricultural industry and may also affect food safety.
Indian agrochemical
ban to reduce India’s presence in international market
Pradip Dave, the chair of the Pesticides
Manufacturers and Formulators Association of India (PMFAI), expressed shock at
the announcement of the agrochemical ban. He stated that the PMFAI intends to
submit a demand to India’s Department of Agriculture that the ban be cancelled.
He stated that the ban announcement was made without any certainty of which
agrochemicals were in common use in India and was made without any warning to
India’s agricultural industry. He argued that the ban was shocking and unfair
and that this action ran contrary to the goal of the recent plan to support
India’s domestic products and stimulate and strengthen the Indian economy. ”
The head of Insecticides India Ltd. stated expressed categorical opposition
to this law. He argued that competition for nonspecialized products in the
international market is fierce, and that India has a strong influence over the
nonspecialized agrochemical market. He claimed that if this ban is put into
effect, then not only will it harm farmers, but it will also have a negative
effect on India’s exports.
After the plan for the agrochemical ban was
announced, the value of United Phosphorus Ltd. (UPL) fell 5.5% to INR 355, as
this company produces several agrochemicals appearing on the ban list. UPL’s
expected income during the fiscal year of 2020 is expected to be approximately
INR 2.3 billion, of which 0.6% may be affected by this ban. Rallis India Ltd.
faced pressure in the stock market, with the price of a single stock falling 2%
to INR 203, again because Rallis produces chemicals that appear on the ban
list. Rallis is predicted to earn approximately INR 700 million during the
fiscal year of 2020, of which approximately 3% may be affected by this ban.
China’s agrochemical industry expected to
benefit from India’s ban
Experts predict that if India carries out the
agrochemical ban as expected, China’s agrochemical market will be able to
benefit greatly. China is the main producer of agrochemicals in the global
market, and India is China’s greatest competitor, so should the ban be enacted,
Chinese companies will experience much less competition. In particular, China’s
disinfectant and insecticide companies are expected to profit.
One particular company expected to profit from
this ban is Jiangsu Yangnong Chemical Co.,Ltd.,
which is China’s main producer of synthetic pyrethroids. Jiangsu Yangnong
Chemical Co., Ltd. is China’s industry leader in the agrochemical engineering,
and the company leads China’s entire agrochemical industry in profits. Through
internal growth and asset coordination, the company plans to grow continuously
throughout the future.
Check here for more resources on China’s pesticides market or email emarket1@cnchemicals.com.