Headwinds in the Indian Crop Protection Market and Potential Green Offshoots

The Indian crop protection market has witnessed a downturn over the past two financial years. Leading players such as UPL and Bayer have faced significant price and margin depletion, raising concerns among shareholders. UPL's revenue, especially, has nearly reduced by two-thirds from Rs 18,000 crores to Rs 5,200 crores. This development serves as a bellwether for the major developments in the crop protection industry over the last two financial years. Other players such as Bayer, Rallis India, and Sharda Crop Chem were not spared and reported considerable pressure on their profitability as evidenced by the decline in the PBT margins. These downtrends ride on the back of several major developments in the global markets.

- By SHREYUS GOPALAKRISHNAN, Senior Consultant, Avalon Consulting

Macroeconomic, environmental and competitive headwinds are collectively responsible for fundamentally altering the market dynamics of the Indian crop protection market.

The worsening of the Indian Crop Protection market has led many of the shareholders and CxOs to question the near-term future and possible turnaround scenarios. The slowdown has grappled all the players worldwide, domestic and International. Therefore, a deeper understanding of the headwinds is key to understanding how to tackle them and the short and long-term strategies that can be developed and executed.

Major Headwinds impacting the industry

A confluence of major headwinds has impacted the prices and margins of the Indian crop protection market severely over the last two years. Erratic Monsoon patterns and deficient rainfall is a key factor impacting the key agricultural regions in India. According to the Indian Agricultural Research Institute, the total rainfall in 2024 and 2023 (~1,100 mm) has been 5% less than the long-term rainfall average of India (~1,200 mm).