Business

Cottonseed firms face double whammy this kharif season

Hybrid cotton seed corporations reminiscent of Rasi Seeds and Kaveri Seeds are dealing with a double whammy this yr. Not solely has the offtake of their Bt cotton hybrid seeds been impacted by the decline in acreage, the elevated adoption of unlawful or unapproved herbicide tolerant (HTBt) seeds by the farmers has additionally hit their gross sales.

Seed business upset

Rasi reported a 20 per cent decline in gross sales of round 1.2 crore packets this season as towards 1.5 crore packets, Ramaswami stated. “This season was not a lot beneficial to the business as there was 15-20 per cent decline in Bt cottonseed gross sales,” stated M Ramaswami, Chairman of Rasi Seeds Pvt Ltd, the most important player within the phase. Ramaswami stated. The seed business is upset and virtually all corporations at the moment are saddled with enormous carry ahead shares, he added.

Just lately, Kaveri Seeds reported a 28 per cent decline in cottonseed volumes and revenues for the June quarter. Kaveri bought 49.7 lakh cottonseed packets in June quarter this yr in contrast with 69.9 lakh packets in similar interval final yr as the corporate noticed dip in gross sales in States reminiscent of Andhra Pradesh, Telangana and Karnataka. Nonetheless, Kaveri had gained market in Gujarat and Haryana.

Additionally learn: As cotton prices rule firm, CCI sees little scope for market intervention

“Gross sales of hybrid seeds throughout the business have been considerably impacted within the quarter below review. Whereas acreages of cotton have been decrease than the earlier yr, the decline in gross sales of branded seeds have been a lot steeper. This was as a result of a big a part of the availability chain comprising our sellers and distributors have been all constrained as a result of pandemic and an erratic monsoon,” stated G V Bhaskar Rao, Chairman and MD, Kaveri Seeds stated within the June quarter earnings assertion.

Based on Agriculture Ministry, cotton acreage was down 7.4 per cent at 116.17 lakh ha as on August 12 in comparison with the identical interval final yr when it was 125.47 lakh ha. “Although cotton costs are superb, there’s no curiosity among the many farmers because of greater prices of cultivation and labour points,” Ramasami stated.

Unlawful HTBt seeds

In addition to, the usage of unlawful HTBt seeds has picked up this yr, affecting the organised seed business, sources stated. Farmers, hit by pink bollworm menace, have taken to such unlawful seeds, primarily in States reminiscent of Maharashtra, Gujarat, Telangana amongst others. “We’re seeing a big enhance in use of unlawful HTBt seeds which is impacting gross sales. We’re engaged in a dialogue with the Authorities to deal with this case,” Rao stated.

The seed business has estimated that gross sales of unlawful HTBT cotton seeds has doubled to round 70 lakh packets this yr. “The unfold of unlawful HTBt seeds is so prolific that an estimated 19-20 per cent of the cotton space has been coated below such unapproved seeds. We don’t know what form it will take within the coming years,” Ramaswami stated.

With enormous carry ahead shares, the organised seed gamers are left with no possibility however to trim their manufacturing, which usually occurs throughout April forward of the beginning of the planting season in June. “Subsequent yr we will right the manufacturing. We might get a small aid if there’s good sale,” Ramasami stated.

As the businesses procure the seeds from farmers below contract farming association at a excessive worth, they’re pressured to hold over the unsold shares to the subsequent cropping season. “Our price of manufacturing is ₹400-450 per kg,” Ramasami stated.

To take care of such carry-over shares, the business faces the chance of funding loss and has to bear the curiosity burden, Ramaswami stated. In addition to there’s a component of uncertainty as some varieties might go out of date with the probability of shift in farmers’ desire within the subsequent cropping season, Ramasami stated.

The industrial cotton seed costs have additionally shot up this yr on the again of bullish development in edible oil costs. Cotton seed costs at the moment are ruling greater at ₹4,500-5,000 per quintal, thus maintaining the worth of the fibre crop greater.

https://www.thehindubusinessline.com/financial system/agri-business/cottonseed-firms-face-double-whammy-this-kharif-season/article36047892.ece | Cottonseed corporations face double whammy this kharif season

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