FLOURISHING FIELDS

Despite near-term hurdles like weather woes and Chinese dumping, India's agrochemical sector boasts robust long-term growth potential

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The global agrochemical sector is facing a downturn, impacted by elevated channel inventories, low product prices, and muted demand. This ripple effect is expected to hit Indian players as well, with revenue and profits of listed companies likely to decline for the first time in a decade in the current fiscal year.

Year 2022 saw inflated agrochemical prices, followed by an aggressive channel destocking in 2023. However, recent dumping by Chinese agrochemical companies has not only reversed these efforts but also raised concerns that it would take another six to nine months for channel inventory to get normalized.

So, will this impact India’s agrochemical sector? The answer is yes, in the near term. Uncertain weather conditions and Chinese dumping pose present challenges. However, despite these headwinds, the long-term growth prospects of India’s agrochemical sector remain robust, supported by several key growth levers.

India is poised to capture a larger share of the thriving global agrochemical market on the back of a numerous factors.

CONSOLIDATION

The global agrochemical industry is oligopolistic, with a handful of companies garnering most revenue. Consolidation appears to be occurring in the sector, with numerous mergers and acquisitions announced in recent years. Given its world-class manufacturing, innovation, and quality capabilities, India is best positioned to enter into strategic partnerships with global giants.

GLOBAL DEMAND