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.
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